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The Role of Salience in Performance Schemes: Evidence from a Field Experiment

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  • Englmaier, Florian

    () (University of Munich)

  • Roider, Andreas

    () (University of Regensburg)

  • Sunde, Uwe

    () (University of Munich)

Abstract

Incentive schemes affect performance and priorities of agents but, in reality, they can be complicated even for simple tasks. We analyze the effects of the salience of incentives in a team production setting where the principal has an interest in quantity and quality of output. We use data from a controlled field experiment that changed the communication of the incentive system without changing the incentive system. The results indicate that salience of incentives itself is statistically and economically important for performance. We find that higher salience of incentives for quantity increases quantity, reduces quality, and increases in-pocket income of team managers.

Suggested Citation

  • Englmaier, Florian & Roider, Andreas & Sunde, Uwe, 2012. "The Role of Salience in Performance Schemes: Evidence from a Field Experiment," IZA Discussion Papers 6448, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp6448
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    2. Fuhai Hong & Tanjim Hossain & John A. List & Migiwa Tanaka, 2013. "Testing the Theory of Multitasking: Evidence from a Natural Field Experiment in Chinese Factories," CESifo Working Paper Series 4522, CESifo.
    3. Fuhai Hong & Tanjim Hossain & John A. List & Migiwa Tanaka, 2018. "Testing The Theory Of Multitasking: Evidence From A Natural Field Experiment In Chinese Factories," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(2), pages 511-536, May.
    4. Florian Ederer & Richard Holden & Margaret Meyer, 2018. "Gaming and strategic opacity in incentive provision," RAND Journal of Economics, RAND Corporation, vol. 49(4), pages 819-854, December.
    5. Schumacher, Heiner & Kemper, Niels, 2015. "Unfair Incentives: A Behavioral Note on Sharecropping," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112860, Verein für Socialpolitik / German Economic Association.
    6. Patrick Kampkötter & Dirk Sliwka, 2016. "The Complementary Use of Experiments and Field Data to Evaluate Management Practices: The Case of Subjective Performance Evaluations," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 172(2), pages 364-389, June.
    7. Sliwka, Dirk & Manthei, Kathrin, 2013. "Multitasking and the Benefits of Objective Performance Measurement - Evidence from a Field Experiment," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79968, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    communication; salience; attention; incentives; field experiments;
    All these keywords.

    JEL classification:

    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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