The Effect of Incentives in Non-Routine Analytical Teams Tasks - Evidence from a Field Experiment

51 Pages Posted: 19 Apr 2018

See all articles by Florian Englmaier

Florian Englmaier

Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Stefan Grimm

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

David Schindler

Tilburg University

Simeon Schudy

University of Munich (LMU)

Date Written: February 21, 2018

Abstract

Despite the prevalence of non-routine analytical team tasks in modern economies, little is known about how incentives influence performance in these tasks. In a field experiment with more than 3000 participants, we document a positive effect of bonus incentives on the probability of completion of such a task. Bonus incentives increase performance due to the reward rather than the reference point (performance threshold) they provide. The framing of bonuses (as gains or losses) plays a minor role. Incentives improve performance also in an additional sample of presumably less motivated workers. However, incentives reduce these workers’ willingness to “explore” original solutions.

Keywords: team work, bonus, incentives, loss, gain, non-routine, exploration

JEL Classification: C920, C930, J330, D030, M520

Suggested Citation

Englmaier, Florian and Grimm, Stefan and Schindler, David and Schudy, Simeon, The Effect of Incentives in Non-Routine Analytical Teams Tasks - Evidence from a Field Experiment (February 21, 2018). CESifo Working Paper Series No. 6903. Available at SSRN: https://ssrn.com/abstract=3164800

Florian Englmaier

Department of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Stefan Grimm

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

Ludwigstrasse 28
Munich, D-80539
Germany

David Schindler

Tilburg University ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Simeon Schudy (Contact Author)

University of Munich (LMU) ( email )

Ludwigstrasse 28
Munich, D-80539
Germany
+49 89 2180 9786 (Phone)

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