Motivational Spillovers from Awards: Crowding Out in a Multitasking Environment
Washington University in Saint Louis - John M. Olin Business School
University of California, Los Angeles (UCLA) - Anderson School of Management
Washington University, Saint Louis - John M. Olin School of Business
August 27, 2014
Harvard Business School NOM Unit Working Paper No. 13-069
This paper proposes and tests a theoretical framework on the impact of workplace awards on employee motivation and performance, and argues that award programs have complex effects that critically depend on individual differences in motivation across tasks. Our theory builds on the existing literature's focus on the direct, positive effect of awards on employees who previously lacked motivation for the now-awarded task, and argues that awards can have deleterious effects on performance for employees with high pre-existing task motivation. Most novelly, the theory predicts that these employees also suffer reduced motivation and performance in tasks not included in the award program. Data from an attendance award program implemented at one of five industrial laundry plants shows evidence consistent with our theory. The program improved performance for employees with attendance issues prior to award introduction, but this effect disappeared once an employee lost award eligibility, and was achieved partly by gaming the award rules. In contrast, workers with perfect pre-program attendance suffered worse attendance after losing eligibility. This employee group is also 8% less efficient in daily laundry tasks after award introduction. Our paper suggests that even purely symbolic awards can generate gaming and crowding out costs that spill over to other important tasks.
Number of Pages in PDF File: 62
Date posted: February 12, 2013 ; Last revised: August 28, 2014
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