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Paying for What Kind of Performance? Performance Pay and Multitasking in Mission-Oriented Jobs

Author

Listed:
  • Jones, Daniel

    (University of Pittsburgh)

  • Tonin, Mirco

    () (Free University of Bozen/Bolzano)

  • Vlassopoulos, Michael

    () (University of Southampton)

Abstract

How does pay-for-performance (P4P) impact productivity, multitasking, and the composition of workers in mission-oriented jobs? These are central issues in sectors like education or healthcare. We conduct a laboratory experiment, manipulating compensation and mission, to answer these questions. We find that P4P has positive effects on productivity on the incentivized dimension of effort and negative effects on the non-incentivized dimension for workers in non-mission-oriented treatments. In mission-oriented treatments, P4P generates minimal change on either dimension. Participants in the non-mission sector – but not in the mission-oriented treatments – sort on ability, with lower ability workers opting out of the P4P scheme.

Suggested Citation

  • Jones, Daniel & Tonin, Mirco & Vlassopoulos, Michael, 2018. "Paying for What Kind of Performance? Performance Pay and Multitasking in Mission-Oriented Jobs," IZA Discussion Papers 11674, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11674
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    More about this item

    Keywords

    prosocial motivation; performance pay; multitasking; sorting;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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