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

53 Pages Posted: 15 Oct 2018 Last revised: 22 Oct 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: October 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: bonus, exploration, gain, incentives, loss, non-routine, team work

JEL Classification: C92, C93, D03, J33, M52

Suggested Citation

Englmaier, Florian and Grimm, Stefan and Schindler, David and Schudy, Simeon, The Effect of Incentives in Non-Routine Analytical Team Tasks - Evidence from a Field Experiment (October 2018). CEPR Discussion Paper No. DP13226, Available at SSRN: https://ssrn.com/abstract=3266418

Florian Englmaier (Contact Author)

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

University of Munich (LMU) ( email )

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

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