We explore the power of behavioral economics to influence the level of effort exerted by students in a low stakes testing environment. We find a substantial impact on test scores from incentives when ...the rewards are delivered immediately. There is suggestive evidence that rewards framed as losses outperform those framed as gains. Nonfinancial incentives can be considerably more cost-effective than financial incentives for younger students, but are less effective with older students. All motivating power of incentives vanishes when rewards are handed out with a delay. Our results suggest that the current set of incentives may lead to underinvestment.
This paper reports the results from a controlled field experiment designed to investigate the causal effect of unannounced, public recognition on employee performance. We hired more than 300 ...employees to work on a three-hour data-entry task. In a random sample of work groups, workers unexpectedly received recognition after two hours of work. We find that recognition increases subsequent performance substantially, and particularly when recognition is exclusively provided to the best performers. Remarkably, workers who did not receive recognition are mainly responsible for this performance increase. Our results are consistent with workers having a preference for conformity and being reciprocal at the same time.
Data, as supplemental material, are available at
http://dx.doi.org/10.1287/mnsc.2015.2291
.
This paper was accepted by John List, behavioral economics
.
We study the impact of status and social recognition on worker performance in a field experiment. In collaboration with an international non-governmental organization, we hired students to work on a ...database project. Students in the award treatment were offered a congratulatory card honoring the best performance. The award was purely symbolic to ensure that any behavioral effect is driven by non-material benefits. Our results show that the award increases performance by about 12 percent on average. The results provide strong evidence for the motivating power of status and social recognition in labor relations.
In this paper, we use two field experiments in professional settings to explore the effort levels of individuals in response to gifts. We extend the literature by looking at non‐financial gifts that ...signal worker appreciation and gifts that combine financial and non‐financial elements with or without a personal touch. We find that while money and appreciation are individually effective, these only work well together when they are combined with a personal touch. This suggests that responses to gifts are sensitive to the presentation of the gift as well as to interpersonal elements; these are factors that have so far been largely ignored in the literature but are easy to incorporate into existing principal–agent models.
A FIELD EXPERIMENT IN MOTIVATING EMPLOYEE IDEAS Gibbs, Michael; Neckermann, Susanne; Siemroth, Christoph
The review of economics and statistics,
10/2017, Letnik:
99, Številka:
4
Journal Article
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We study a field experiment at a large technology company. Employees were encouraged to submit ideas on process and product improvements. The company randomly assigned nineteen teams into treatment ...and control groups. Treatment team employees received rewards if their ideas were approved. Nothing changed for control team employees. Our main finding is that rewards substantially increased the quality of ideas. Rewards increased participation in the suggestion system but decreased ideas per participating employee, with no net effect on the quantity of ideas. Broader participation persisted after the reward was discontinued, suggesting habituation. We find no evidence for motivational crowding out.
•We conducted a principal-agent, real-effort, lab experiment on unexpected recognition.•Financial recognition, a thank you, and relative performance information all have the same effect.•It is the ...low performers and not the high performers that increase subsequent effort.•A disutility of being behind can explain the results.•We discuss implications of our findings for both theory and application.
Unexpected, informal recognition is common in the workplace, but rarely analyzed by academics. The few existing studies have generated surprising results: no impact of selective recognition on future productivity for those workers who receive recognition, but increases in productivity for those who do not. We confirm those results for recognition in the form of a Thank you message and show that the same patterns hold true with unexpected financial recognition. Low-performing workers do better when others are recognized but they are left out. Previous studies have all argued that the pure relative performance information that is revealed through recognition drives these effects. We test this hypothesis with a treatment that has relative rank information only and show that this is indeed the case: financial or verbal recognition are not necessary to induce low performers to increase subsequent performance.
We manipulate workers' perceived meaning of a job in a field experiment and interact meaning of work with both financial and recognition incentives. Results show that workers exert more effort when ...meaning is high. Money has a positive effect on performance that is independent of meaning. In contrast, meaning and recognition interact negatively. Our results provide new insights into the stability of incentive effects across important work contexts. They also suggest that meaning and worker recognition may operate via the same motivational channel. (JEL C93, J33, M12, M52)
This paper reports the results from a large-scale laboratory experiment that compared the impacts of a performance bonus and a wage gift on output from a creative task and a simple task. We find that ...the performance bonus substantially increases output in both the creative task and the simple task. By comparison, the wage gift increases output only in the simple task. Additional experimental treatments suggest that reciprocity in the creative task is inhibited because agents are uncertain about how their efforts affect the payments that accrue to the principal as a result of the agents’ work.
This paper explores how loss-framed incentives affect behavior in a multitasking environment in which participants have more than one way of recovering (expected) losses. In a real-effort laboratory ...experiment, we offer participants task incentives that are framed as either a reward (gain) or penalty (loss). We study their responses along three dimensions: performance in the incentivized task, theft, and voluntary provision of help. We find that framing incentives as a penalty rather than as a reward does not significantly improve task performance, but it increases theft and leads to a small and insignificant reduction in the share of participants willing to help the experimenter. Secondary analyses based on our theoretical framework help us pin down the mechanism at play and suggest that loss aversion drives participants’ response. Our findings have important implications for incentive design in practice.
This paper was accepted by Axel Ockenfels, behavioral economics and decision analysis.
This paper reports the results of a large randomized field experiment that investigates the extent to which nudges can stimulate student participation in teaching evaluations. The three nudges that ...we used were designed to either: (1) heighten students’ perceived impact of teaching evaluations, (2) communicate a descriptive norm of high participation, and (3) use the commitment-consistency principle by asking students to commit to participation. We find that none of the nudges were effective: all treatment effects are insignificant and close to zero in magnitude. Exploring heterogeneous treatment effects, we find evidence that the effectiveness of both the impact and commitment treatments differed across students. The impact treatment had a negative effect on the participation of bachelor-level students, but not on that of master-level students. The commitment treatment increased participation among students with good average grades, whereas it decreased participation for students whose average grades were poor.
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