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

Author

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  • 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 of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11674
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    References listed on IDEAS

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    Cited by:

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    2. Sheheryar Banuri & Philip Keefer & Damien de Walque, 2017. "Love the job... or the patient? Task vs. mission-based motiviations in healthcare," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 17-09, School of Economics, University of East Anglia, Norwich, UK..
    3. Cadena, Brian C. & Smith, Austin C., 2022. "Performance pay, productivity, and strategic opt-out: Evidence from a community health center," Journal of Public Economics, Elsevier, vol. 206(C).
    4. Gall, Thomas & Hu, Xiaocheng & Vlassopoulos, Michael, 2023. "Incentivizing Team Leaders: A Firm-Level Experiment on Subjective Performance Evaluation of Leadership Skills," IZA Discussion Papers 16123, Institute of Labor Economics (IZA).
    5. Vladasel, Theodor & Parker, Simon C. & Sloof, Randolph & van Praag, Mirjam C., 2022. "Revenue Drift, Incentives, and Effort Allocation in Social Enterprises," IZA Discussion Papers 15716, Institute of Labor Economics (IZA).
    6. Briscese, Guglielmo & Feltovich, Nick & Slonim, Robert L., 2021. "Who benefits from corporate social responsibility? Reciprocity in the presence of social incentives and self-selection," Games and Economic Behavior, Elsevier, vol. 126(C), pages 288-304.
    7. Briscese, Guglielmo & Slonim, Robert L. & Feltovich, Nicholas, 2019. "Who Benefits from Corporate Social Responsibility?," Working Papers 2019-18, University of Sydney, School of Economics.
    8. Cadena, Brian C. & Smith, Austin C., 2019. "Performance Pay and Productivity in Health Care: Evidence from Community Health Centers," IZA Discussion Papers 12586, Institute of Labor Economics (IZA).
    9. Barigozzi, Francesca & Burani, Nadia, 2019. "Competition for talent when firms' mission matters," Games and Economic Behavior, Elsevier, vol. 116(C), pages 128-151.

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    More about this item

    Keywords

    prosocial motivation; performance pay; multitasking; sorting;
    All these keywords.

    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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