Abstract

http://ssrn.com/abstract=2215922
 
 

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The Dirty Laundry of Employee Award Programs: Evidence from the Field


Timothy Gubler


Washington University in Saint Louis - John M. Olin Business School

Ian Larkin


Harvard Business School - Negotiation, Organizations and Markets Unit

Lamar Pierce


Washington University, Saint Louis - John M. Olin School of Business

February 11, 2013

Harvard Business School NOM Unit Working Paper No. 13-069

Abstract:     
Many scholars and practitioners have recently argued that corporate awards are a "free" way to motivate employees. We use field data from an attendance award program implemented at one of five industrial laundry plants to show that awards can carry significant spillover costs and may be less effective at motivating employees than the literature suggests. Our quasi-experimental setting shows that two types of unintended consequences limit gains from the reward program. First, employees strategically game the program, improving timeliness only when eligible for the award, and call in sick to retain eligibility. Second, employees with perfect pre-program attendance or high productivity suffered a 6-8% productivity decrease after program introduction, suggesting they were demotivated by awards for good behavior they already exhibited. Overall, our results suggest the award program decreased plant productivity by 1.4%, and that positive effects from awards are accompanied by more complex employee responses that limit program effectiveness.

Number of Pages in PDF File: 36

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Date posted: February 12, 2013 ; Last revised: February 21, 2013

Suggested Citation

Gubler, Timothy and Larkin, Ian and Pierce, Lamar, The Dirty Laundry of Employee Award Programs: Evidence from the Field (February 11, 2013). Harvard Business School NOM Unit Working Paper No. 13-069. Available at SSRN: http://ssrn.com/abstract=2215922 or http://dx.doi.org/10.2139/ssrn.2215922

Contact Information

Timothy Gubler
Washington University in Saint Louis - John M. Olin Business School ( email )
One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States
Ian Larkin (Contact Author)
Harvard Business School - Negotiation, Organizations and Markets Unit ( email )
Soldiers Field
Boston, MA 02163
United States
617-495-6884 (Phone)
617-495-5672 (Fax)
Lamar Pierce
Washington University, Saint Louis - John M. Olin School of Business ( email )
One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States
314-935-5205 (Phone)
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