Hidden Benefits of Reward: A Field Experiment on Motivation and Monetary Incentives

Kvaløy, Ola; Nieken, Petra und Schöttner, Anja (December 2013): Hidden Benefits of Reward: A Field Experiment on Motivation and Monetary Incentives. SFB/TR 15 Discussion Paper No. 451

Abstract

We conducted a field experiment in a controlled work environment to investigate the effect of motivational talk and its interaction with monetary incentives. We find that motivational talk significantly improves performance only when accompanied by performance pay. Moreover, performance pay slightly reduces performance unless it is accompanied by motivational talk. These effects also carry over to the quality of work. Performance pay alone leads to more mistakes. Adding motivational talk makes the difference. In treatments with performance pay, motivational talk increases output by about 20 percent and reduces the ratio of mistakes by more than 40 percent.

• Item Type: Paper
• Keywords: Verbal Motivation, Performance Pay, Field Experiment
• Faculties: Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems; Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > B4 - Die Gestaltung von Turnieren im Rahmen der Corporate Governance
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: C93, M52, J33
• Language: English