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Hidden Benefits of Reward: A Field Experiment on Motivation and Monetary Incentives

Author

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  • Ola Kvaløy
  • Petra Nieken
  • Anja Schöttner

Abstract

We conduct a field experiment in a controlled work environment to investigate the effect of motivational talk and its interaction with monetary incentives. We find that motivational talk significantly improves performance only if it is accompanied by performance pay. Moreover, performance pay reduces performance unless it is accompanied by motivational talk. By adding motivational sentences to an otherwise neutral explanation of the work task, the effect of performance pay goes from slightly negative to significantly positive. Hence, we find what we call a hidden benefit of monetary rewards: complementarity between performance pay and motivational talk.

Suggested Citation

  • Ola Kvaløy & Petra Nieken & Anja Schöttner, 2013. "Hidden Benefits of Reward: A Field Experiment on Motivation and Monetary Incentives," CESifo Working Paper Series 4393, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_4393
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    Citations

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    Cited by:

    1. Michael Kosfeld & Susanne Neckermann & Xiaolan Yang, 2017. "The Effects Of Financial And Recognition Incentives Across Work Contexts: The Role Of Meaning," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 237-247, January.
    2. Kvaløy, Ola & Schöttner, Anja, 2015. "Incentives to motivate," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 26-42.
    3. repec:eee:jeborg:v:136:y:2017:i:c:p:76-90 is not listed on IDEAS
    4. Bradler, Christiane & Neckermann, Susanne, 2016. "The magic of the personal touch: Field experimental evidence on money appreciation as gifts," ZEW Discussion Papers 16-043, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. Christiane Bradler & Susanne Neckermann, 2016. "The Magic of the Personal Touch: Field Experimental Evidence on Money and Appreciation as Gifts," Tinbergen Institute Discussion Papers 16-045/VII, Tinbergen Institute.

    More about this item

    Keywords

    verbal motivation; performance pay; field experiment;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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