When Individuals Form Teams: Experimental Evidence Regarding Links Among Monetary Incentives, Stress, Effort, Attractiveness and Performance

34 Pages Posted: 4 Aug 2010

See all articles by Nick Fessler

Nick Fessler

University of Texas at Tyler

Connie Esmond-Kiger

Ohio University - College of Business

John G. Wermert

Middle Tennessee State University - Department of Accounting

Charles D. Bailey

James Madison University

Date Written: July 17, 2010

Abstract

This study extends research on the determinants of performance by examining the effect of compensation scheme and perceptions of task attractiveness on team performance. In a laboratory experiment all participants completed a cognitively difficult task both individually and in teams of three individuals. Both individuals and teams were asked to self-report their perceptions of the task’s attractiveness before and after completing the task for compensation, and were compensated for their task performance using one of two compensation schemes: fixed-wage or incentive-based. All links in the theoretical model were supported. Team results provide support for links between Compensation and Stress; Effort and Performance; Attractiveness and Effort; and finally, between Stress and Change in Attractiveness. Individual results provide support for links between Compensation and Stress; Stress and Effort; Effort and Performance; Attractiveness and Performance; Compensation and Change in Attractiveness; Stress and Change in Attractiveness; and finally, between Change in Attractiveness and Performance. Additionally, we find evidence that Attractiveness is a more important determinant of Effort and Performance in the absence of incentive-based compensation.

Keywords: Incentive compensation, Stress, Effort, Task attractiveness, Performance, Teams

JEL Classification: D79, M49

Suggested Citation

Fessler, Nick and Esmond-Kiger, Connie and Wermert, John G. and Bailey, Charles D., When Individuals Form Teams: Experimental Evidence Regarding Links Among Monetary Incentives, Stress, Effort, Attractiveness and Performance (July 17, 2010). Available at SSRN: https://ssrn.com/abstract=1652959 or http://dx.doi.org/10.2139/ssrn.1652959

Nick Fessler (Contact Author)

University of Texas at Tyler ( email )

Tyler, TX
United States
903-565-5733 (Phone)

Connie Esmond-Kiger

Ohio University - College of Business ( email )

Athens, OH 45701-2979
United States

John G. Wermert

Middle Tennessee State University - Department of Accounting ( email )

P.O. Box 50
Murfreesboro, TN 37132
United States

Charles D. Bailey

James Madison University ( email )

Harrisonburg, VA 22807
United States
901 484-0867 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
87
Abstract Views
745
rank
288,191
PlumX Metrics