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

30 Pages Posted: 4 Apr 2012

See all articles by Florian Englmaier

Florian Englmaier

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics

Andreas Roider

IZA Institute of Labor Economics; University of Regensburg - Department of Economics and Econometrics

Uwe Sunde

Ludwig Maximilian University of Munich (LMU)

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Date Written: March 30, 2012

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.

Keywords: incentives, attention, salience, communication, field experiments

JEL Classification: M520, J300, D030, D800

Suggested Citation

Englmaier, Florian and Roider, Andreas and Roider, Andreas and Sunde, Uwe, The Role of Salience in Performance Schemes: Evidence from a Field Experiment (March 30, 2012). CESifo Working Paper Series No. 3771, Available at SSRN: https://ssrn.com/abstract=2034232 or http://dx.doi.org/10.2139/ssrn.2034232

Florian Englmaier

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Ludwigstrasse 28 III/ VG
D-80539 Munich
Germany

Andreas Roider

University of Regensburg - Department of Economics and Econometrics ( email )

Universitaetsstrasse 31
D-93040 Regensburg
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Uwe Sunde (Contact Author)

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

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