Goal setting and monetary incentives: when large stakes are not enough

The aim of this paper is to test the effectiveness of wage-irrelevant goal setting policies in a laboratory environment. In our design, managers can assign a goal to their workers by setting a certain level of performance on the work task. We establish our theoretical conjectures by developing a model where assigned goals act as reference points to workers’ intrinsic motivation. Consistent with our model, we find that managers set goals which are challenging but attainable for an average-ability worker. Workers respond to these goals by increasing effort, performance and by decreasing on-the-job leisure activities with respect to the no-goal setting baseline. Finally, we study the interaction between goal setting and monetary rewards and find that goal setting is most effective when monetary incentives are strong. These results suggest that goal setting may produce intrinsic motivation and increase workers’ performance beyond what is achieved using solely monetary incentives.

An Assessment of local government management motivational programs : performance targeting with and without monetary incentives /

"September 30, 1981."

Prepaid monetary incentives on mail survey response

Increasing mail survey response using monetary incentives is a proven, but not always cost-effective, method in every population. This paper tackles the questions of whether it is worth using monetary incentives and the size of the inducement by testing a regression model of the impact of prepaid monetary incentives on response rates in consumer and organizational mail surveys. The results support their use and show that the inducement value makes a significant impact on the effect size. Importantly, no significant differences were found between consumer and organizational populations.

The optimum prepaid monetary incentives for mail surveys

Increasing mail-survey response using monetary incentives is a proven, but not always cost-effective method in every population. This paper tackles the questions of whether it is worth using monetary incentives and the size of the inducement by testing a logit model of the impact of prepaid monetary incentives on response rates in consumer and organizational mail surveys. The results support their use and show that the inducement value makes a significant impact on the effect size. Importantly, no significant differences were found between consumer and organizational populations. A cost-benefit model is developed to estimate the optimum incentive when attempting to minimize overall survey costs for a given sample size. © 2006 Operational Research Society Ltd. All rights reserved.

Prepaid monetary incentives on mail survey response

Increasing mail survey response using monetary incentives is a proven, but not always cost-effective, method in every population. This paper tackles the questions of whether it is worth using monetary incentives and the size of the inducement by testing a regression model of the impact of prepaid monetary incentives on response rates in consumer and organizational mail surveys. The results support their use and show that the inducement value makes a significant impact on the effect size. Importantly, no significant differences were found between consumer and organizational populations.

The Determinants of Individual Performance: Empirical Essays on the Importance of Soft Skills and Monetary Incentives

This dissertation consists of three papers. The first paper "Managing the Workload: an Experiment on Individual Decision Making and Performance" experimentally investigates how decision-making in workload management affects individual performance. I designed a laboratory experiment in order to exogenously manipulate the schedule of work faced by each subject and to identify its impact on final performance. Through the mouse click-tracking technique, I also collected interesting behavioral measures on organizational skills. I found that a non-negligible share of individuals performs better under externally imposed schedules than in the unconstrained case. However, such constraints are detrimental for those good in self-organizing. The second chapter, "On the allocation of effort with multiple tasks and piecewise monotonic hazard function", tests the optimality of a scheduling model, proposed in a different literature, for the decisional problem faced in the experiment. Under specific assumptions, I find that such model identifies what would be the optimal scheduling of the tasks in the Admission Test. The third paper "The Effects of Scholarships and Tuition Fees Discounts on Students' Performances: Which Monetary Incentives work Better?" explores how different levels of monetary incentives affect the achievement of students in tertiary education. I used a Regression Discontinuity Design to exploit the assignment of different monetary incentives, to study the effects of such liquidity provision on performance outcomes, ceteris paribus. The results show that a monetary increase in the scholarships generates no effect on performance since the achievements of the recipients are all centered near the requirements for non-returning the benefit. Secondly, students, who are actually paying some share of the total cost of college attendance, surprisingly, perform better than those whose cost is completely subsidized. A lower benefit, relatively to a higher aid, it motivates students to finish early and not to suffer the extra cost of a delayed graduation.

Contractual allocation of decision rights and incentives: The case of automobile distribution

We analyze empirically the allocation of rights and monetary incentives in automobile franchise contracts. These contracts substantially restrict the decision rights of dealers and grant manufacturers extensive contractual completion and enforcement powers, converting the manufacturers, de facto, in a sort of quasi-judiciary instance. Variation in the allocation of decision rights andincentive intensity is explained by the incidence of moral hazard in the relation. In particular, when the cost of dealer moral hazard is higher and the risk of manufactureropportunism is lower, manufacturers enjoy more discretion in determining the performance required from their dealers and in using mechanisms such as monitoring, termination and monetary incentives to ensure such performance is provided. We also explore the existence of interdependencies between the different elements of the system. and find some complementarities between completion and termination rights, and between monitoring rights and the intensity of incentives.

Neural basis of the undermining effect of monetary reward on intrinsic motivation

Contrary to the widespread belief that people are positively motivated by reward incentives, some studies have shown that performance-based extrinsic reward can actually undermine a person's intrinsic motivation to engage in a task. This “undermining effect” has timely practical implications, given the burgeoning of performance-based incentive systems in contemporary society. It also presents a theoretical challenge for economic and reinforcement learning theories, which tend to assume that monetary incentives monotonically increase motivation. Despite the practical and theoretical importance of this provocative phenomenon, however, little is known about its neural basis. Herein we induced the behavioral undermining effect using a newly developed task, and we tracked its neural correlates using functional MRI. Our results show that performance-based monetary reward indeed undermines intrinsic motivation, as assessed by the number of voluntary engagements in the task. We found that activity in the anterior striatum and the prefrontal areas decreased along with this behavioral undermining effect. These findings suggest that the corticobasal ganglia valuation system underlies the undermining effect through the integration of extrinsic reward value and intrinsic task value.

Comparison between Eysenck's and Gray's models of personality in the prediction of motivational work criteria

Impulsivity based on Gray's [Gray, J. A. (1982) The neuropsychology of anxiety: an enquiry into the function of the septo-hippocampal system. New York: Oxford University Press: (1991). The neurophysiology of temperament. In J. Strelau & A. Angleitner. Explorations in temperament: international perspectives on theory and measurement. London. Plenum Press]. physiological model of personality was hypothesised to be more predictive of goal oriented criteria within the workplace than scales derived From Eysenck's [Eysenck. H.J. (1967). The biological basis of personality. Springfield, IL: Charles C. Thompson.] physiological model of personality. Results confirmed the hypothesis and also showed that Gray's scale of Impulsivity was generally a better predictor than attributional style and interest in money. Results were interpreted as providing support for Gray's Behavioural Activation System which moderates response to reward. (C) 2001 Elsevier Science Ltd. All rights reserved.

Access as a motivational device: implications for human resource management

This paper analyzes the employment relationship on the basis of the notion of access. We argue that the degree of access provided by a job is an incentive to activate the employee’s self-actualization needs. We investigate the effect of access on the workers’ performance through an agency model and provide a number of propositions with practical implications for personnel policies. Our results are consistent with the intuition emerged from the real business practice as well as with many of the arguments on the substitutive role between monetary and non-monetary incentives frequently reported in the literature.

Money, Fame and the Allocation of Talent: Brain Drain, the Matthew Effect and the Institution of Science

The earning structure in science is known to be flat relative to the one in the private sector, which could cause a brain drain toward the private sector. In this paper, we assume that agents value both money and fame and study the role of the institution of science in the allocation of talent between the science sector and the private sector. Following works on the Sociology of Science, we model the institution of science as a mechanism distributing fame (i.e. peer recognition). We show that since the intrinsic performance is less noisy signal of talent in the science sector than in the private sector, a good institution of science can mitigate the brain drain. We also find that providing extra monetary incentives through the market might undermine the incentives provided by the institution and thereby worsen the brain drain. Finally, we study the optimal balance between monetary and non-monetary incentives in science.

Money, fame and the allocation of talent: Brain drain and the institution of science

The earning structure in science is known to be flat relative to the one in theprivate sector, which could cause a brain drain toward the private sector. In thispaper, we assume that agents value both money and fame and study the role ofthe institution of science in the allocation of talent between the science sector andthe private sector. Following works on the Sociology of Science, we model theinstitution of science as a mechanism distributing fame (i.e. peer recognition). Weshow that since the intrinsic performance is less noisy signal of talent in the sciencesector than in the private sector, a good institution of science can mitigate thebrain drain. We also find that providing extra monetary incentives through themarket might undermine the incentives provided by the institution and therebyworsen the brain drain. Finally, we study the optimal balance between monetaryand non-monetary incentives in science.

Tiedon jakamiseen vaikuttavat tekijät asiantuntijatyössä

Yhteiskunnan muuttuessa entistä tietovaltaisemmaksi, tiedon jakaminen nähdään kaikkein merkittävimpänä tietoprosessina organisaation kehittymisen kannalta. Tässä pro gradu -tutkielmassa selvitettiin, mitkä tekijät vaikuttavat tiedon jakamiseen asiantuntijatyössä. Tutkimus toteutettiin tapaustutkimuksena ja aineisto analysoitiin teorialähtöisen sisällönanalyysin avulla. Tutkimuksen tulosten perusteella asiantuntijatyötä tekevien tiedon jakamiseen vaikuttavat tekjiät ovat sisäinen motivaatio, yksilöiden välinen luottamus sekä organisaation rakenne ja kulttuuri. Tutkimuksen mukaan työ itsessään palkitsee ja motivoi tiedon jakamiseen, mutta yksilöiden välillä tulee olla hyväntahtoisuuteen ja pätevyyteen liittyvää luottamusta. Organisaation hierarkkisuus, käytettävissä olevan ajan, yhteisöllisyyden ja arvostuksen puute heikentävät tiedon jakamista. Sitä vastoin organisaation avoin kulttuuri tukee tiedon jakamista. Rahallisen palkitsemisen ei nähty vaikuttavan tiedon jakamiseen.

Consolidation power of extrinsic rewards: reward cues enhance long-term memory for irrelevant past events

Recent research suggests that extrinsic rewards promote memory consolidation through dopaminergic modulation processes. However, no conclusive behavioral evidence exists given that the influence of extrinsic reward on attention and motivation during encoding and consolidation processes are inherently confounded. The present study provides behavioral evidence that extrinsic rewards (i.e., monetary incentives) enhance human memory consolidation independently of attention and motivation. Participants saw neutral pictures, followed by a reward or control cue in an unrelated context. Our results (and a direct replication study) demonstrated that the reward cue predicted a retrograde enhancement of memory for the preceding neutral pictures. This retrograde effect was observed only after a delay, not immediately upon testing. An additional experiment showed that emotional arousal or unconscious resource mobilization cannot explain the retrograde enhancement effect. These results provide support for the notion that the dopaminergic memory consolidation effect can result from extrinsic reward. (PsycINFO Database Record (c) 2013 APA, all rights reserved)(journal abstract)