Effort Choices between Group and Individual Tasks in Mixed Incentives

Posted: 18 May 2017 Last revised: 16 Nov 2017

See all articles by Yu Tian

Yu Tian

University of Central Florida - Kenneth G. Dixon School of Accounting

Brad Tuttle

University of South Carolina - Department of Accounting

Robert A. Leitch

University of South Carolina

Date Written: May 17, 2017

Abstract

Mixed individual and group incentives are widely used in practice under the assumption that by incentivizing both, organizations can increase total effort and predictably direct effort. The present paper explores these assumptions under two forms of mixed incentives, one in which incentives are implemented in a simultaneous/independent manner and the other in a sequential/dependent manner. Results suggest that adding individual incentives to group incentives motivates greater total effort, but adding group incentives to individual incentives does not regardless of the structure or amount of the mixed incentives. We also find that the independent mixed incentives in our setting lead individuals to allocate a greater (less) percentage of total effort to individual (group) tasks than the sequential mixed incentives. Our findings have important implications to incentive systems design by suggesting that organizations need to consider a fit between the incentives and where they would like their employees to allocate effort.

Keywords: Mixed Incentives, Group Incentives, Individual Incentives, Effort Allocation, Total Effort

JEL Classification: M40

Suggested Citation

Tian, Yu and Tuttle, Brad and Leitch, Robert A., Effort Choices between Group and Individual Tasks in Mixed Incentives (May 17, 2017). Journal of Management Accounting Research, Forthcoming, DOI: org/10.2308/jmar-51833 , Available at SSRN: https://ssrn.com/abstract=2970267

Yu Tian (Contact Author)

University of Central Florida - Kenneth G. Dixon School of Accounting ( email )

University of Central Florida
P.O. Box 161400
Orlando, FL 32816-1400
United States
(407) 823-2966 (Phone)
(407) 823-3881 (Fax)

Brad Tuttle

University of South Carolina - Department of Accounting ( email )

The Francis M. Hipp Building
1705 College Street
Columbia, SC 29208
United States
803-777-6639 (Phone)
803-777-6876 (Fax)

Robert A. Leitch

University of South Carolina ( email )

Darla Moore School of Business 1705 College Street
Columbia, SC 29208
United States
803-777-6418 (Phone)
803-777-0712 (Fax)

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