The Effect of Incentives in Non-Routine Analytical Team Tasks

104 Pages Posted: 19 Apr 2018

See all articles by Florian Englmaier

Florian Englmaier

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

Stefan Grimm

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

Dominik Grothe

Ludwig Maximilian University of Munich (LMU)

David Schindler

Tilburg University

Simeon Schudy

Ulm University; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: February 21, 2018

Abstract

Despite the prevalence of non-routine analytical team tasks in modern economies, little is understood regarding how incentives influence performance in these tasks. In a series of field experiments involving more than 5,000 participants, we investigate how incentives alter behavior in teams working on such a task. We document a positive effect of bonus incentives on performance, even among teams with strong intrinsic motivation. Bonuses also transform team organization by enhancing the demand for leadership. Exogenously increasing teams’ demand for leadership results in performance improvements comparable to those seen with bonus incentives, rendering it as a likely mediator of incentive effects.

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 Grothe, Dominik and Schindler, David and Schudy, Simeon, The Effect of Incentives in Non-Routine Analytical Team Tasks (February 21, 2018). CESifo Working Paper Series No. 6903, Available at SSRN: https://ssrn.com/abstract=3164800 or http://dx.doi.org/10.2139/ssrn.3164800

Florian Englmaier

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

Ludwigstrasse 28 III/ VG
D-80539 Munich
Germany

Stefan Grimm

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

Ludwigstrasse 28
Munich, D-80539
Germany

Dominik Grothe

Ludwig Maximilian University of Munich (LMU) ( email )

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

David Schindler

Tilburg University ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Simeon Schudy (Contact Author)

Ulm University ( email )

Albert-Einstein-Alee 11
Ulm, D-89081
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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