The Performance Implication Of Goal Achievability In Incentive Contracts And Feedback
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| Author | : Yasheng Chen |
| Publisher | : |
| Total Pages | : 26 |
| Release | : 2013 |
| Genre | : |
| ISBN | : |
This study investigates the performance feedback and goal achievability in incentive effects on employees' effort and performance. We perform an experiment to examine whether the use of goal-specific feedback and incentive contracts have an interaction effect on task performance. Using the Mirametrix S2 eye tracking device to measure the level of effort, we find that the feedback effect on effort depend on goal achievability specified in the incentive contract. Specifically, we find that when employees are contracted based on achievable goals, feedback decreases their level of effort. By contrast, when employees are contracted based on more challenging but attainable goals, feedback increases their level of effort. Furthermore, we find that the level of effort has a significant positive impact on task performance. These findings have important implications for the design of control and compensation systems in organizations that aim for a higher employees' performance.
| Author | : George Lee |
| Publisher | : |
| Total Pages | : 184 |
| Release | : 2015 |
| Genre | : |
| ISBN | : |
When employees work hard, they exert more effort on job tasks (task effort); and when employees learn hard, they exert more effort to learn (learning effort). Task effort and learning effort are important causes of improved performance. This thesis investigates whether the use of tournament schemes motivates employees to work harder and learn harder, and also whether providing performance feedback in tournament schemes has any impact on task effort and learning effort.This thesis has three goals. The first is to investigate the relationship between incentives, learning, and performance. The literature on whether learning interacts with incentives to improve performance is inconclusive, because no prior research has provided a good test of this question (as noted by Bonner and Sprinkle 2002; Bailey and Fessler 2011; Bailey et al. 1998, and as remains true today). The second goal is to investigate the motivational effect of tournament schemes on effort. The literature suggests that effort is difficult to observe directly or to quantify; as a result, it is hard to verify whether tournament schemes motivate employees' task effort and learning effort. This thesis uses an eye-tracking device to measure effort, by measuring eye position, eye movements, and pupil size. The third goal is to investigate the effect of performance feedback on task effort, learning effort, and performance in the tournament setting.I posit and show evidence that both task effort and learning effort are higher in multiple-winner schemes than in either winner-takes-all schemes or piece-rate schemes. Task effort is directly positively associated with performance, while learning effort causes learning transfer to a job task, also yielding a positive effect on performance. I find that providing relative performance feedback in the tournament setting has no significant impact on task effort or learning effort.These findings have practical value for many corporations, which are constantly re-evaluating the effectiveness of their incentive schemes and reporting systems while investing in learning initiatives to help employees transfer learned skills to job tasks. Organizations may use the insights of this thesis to help them design learning initiatives and motivate employees to transfer learned skills to their job tasks.
| Author | : Leslie Berger |
| Publisher | : |
| Total Pages | : |
| Release | : 2009 |
| Genre | : |
| ISBN | : |
| Author | : Edwin A. Locke |
| Publisher | : |
| Total Pages | : 440 |
| Release | : 1990 |
| Genre | : Business & Economics |
| ISBN | : |
| Author | : Geoffrey B. Sprinkle |
| Publisher | : |
| Total Pages | : |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
This paper reports the results of an experiment that examines how incentive-based compensation contracts compare to flat-wage compensation contracts in motivating individual learning and performance. I use a multiperiod cognitive task where the accounting system generates information (feedback) that has both a contracting role and a belief-revision role. The results suggest that incentives enhance performance and the rate of improvement in performance by increasing both: (1) the amount of time participants devoted to the task, and (2) participants' analysis and use of information. Further, I find evidence that incentives improve performance only after considerable feedback and experience, which may help explain why many prior one-shot decision-making experiments show no incentive effects. Collectively, the results suggest that incentives induce individuals to work longer and smarter, thereby increasing the likelihood that they will develop and use the innovative strategies frequently required to perform well in complex judgment tasks and learning situations.
| Author | : Carolyn Stringer |
| Publisher | : Business Expert Press |
| Total Pages | : 157 |
| Release | : 2012-01-13 |
| Genre | : Business & Economics |
| ISBN | : 1606491385 |
Targets are an important part of our work life, whether we are setting them or meeting them. Target setting forms part of the budgeting process and the performance management of business units and individuals. Unfortunately the behavioral impacts of target setting on performance are not well understood, and this can lead to serious consequences such as game playing. Target setting is an under-researched area. This book will help you fill the gap in target setting for performance. The pivotal issue in target setting is that it is an art as well as a science. Perhaps more of an art, requiring a balance between the psychologies of the people taking initiatives, the science of estimating probabilities and aligning with strategies, coupled with the effects of incentives. Another feature of this book is how the authors drew on ideas and research across disciplines, which is rarely done in this field. Inside this book, you will be introduced to some of the important methods in target setting such as forecasting, sensitivity analysis, and probability analysis; all of which include practical examples to show how these techniques can be directly applied. In the end, you'll learn how interrelated the various parts of organizational activities are and how they impact on each other, which is important since target setting must include an understanding of the organizational context (e.g., people, competitive environment, structure, strategy) as well as the impact of incentive compensation and information flows.
| Author | : Bernhard Erich Reichert |
| Publisher | : |
| Total Pages | : |
| Release | : 2017 |
| Genre | : |
| ISBN | : |
Research in psychology has identified that individuals have two distinct neurologically based motivational systems. One system is the behavioral activation system (BAS), which activates individual motivation in response to signals of reward in order to “achieve success”. The second system is the behavioral inhibition system (BIS), which activates motivation in response to signals of goal conflict in order to “avoid failure”. This paper uses survey and archival evaluation data to examine whether these motivation orientations impact the effectiveness of incentive contracts. We predict and find that using performance measures that are sensitive to effort in compensation contracts leads to a decrease in performance for individuals high in BIS. In contrast, BAS has a positive effect on performance regardless of performance measure sensitivity. These findings indicate that individual differences in motivational orientation may overturn the belief that sensitive performance measures can unequivocally improve incentive contracts.
| Author | : Daniel B. Sundberg |
| Publisher | : |
| Total Pages | : 147 |
| Release | : 2015 |
| Genre | : |
| ISBN | : |
This study examined the relative effects of three incentive pay systems, piece-rate pay, threshold piece-rate pay, and bonus pay, on performance when individuals were given the same five-tiered performance goals. A fourth system, wage pay, served as a control. The task was a computerized simulation of a medical data entry job and the primary dependent variable was the number of correctly completed patient records. Sixty-six college students were randomly assigned to one of the four pay conditions, and attended one 60-minute covariate session and five 60-minute experimental sessions. Participants in the wage pay condition earned $6.50 per session; those in the three incentive pay conditions earned a base rate of $4.50 per session, and were able to earn up to $3.00 in incentive pay. An analysis of covariance showed no significant differences in performance among any of the four pay groups, or across time. Such findings indicate that organizations may be able to produce gains in performance similar to those found with incentive pay, through the use of tiered goals and feedback. These findings contradict past data that show that performance contingent monetary incentives produce gains in performance above what is seen with wage pay alone. The findings also support a limited body of research that suggests the effects of incentive pay systems may be strongly influenced by performance goals. Analysis of additional variables, further implications, and future directions for research are discussed in detail.
| Author | : Jan Bouwens |
| Publisher | : |
| Total Pages | : |
| Release | : 2006 |
| Genre | : |
| ISBN | : |
Using data from a third-party survey on compensation practices at 151 Dutch firms, we show that less noisy or distorted performance measures and higher cash bonuses are associated with better-directed effort and improved employee selection. Specifically, 1) an increase in the cash bonus increases the selection effects of incentive contracts, but does not independently affect the effort that employees deliver, and 2) performance measure properties directly impact both effort and the selection functioning of incentive contracts. These results hold after controlling for an array of incentive contract design characteristics and for differences in organizational context. Our estimation procedures address several known problems with using secondary datasets.
| Author | : Isabell M. Welpe |
| Publisher | : Springer |
| Total Pages | : 493 |
| Release | : 2014-11-07 |
| Genre | : Business & Economics |
| ISBN | : 3319097857 |
This book contributes to the current discussion in society, politics and higher education on innovation capacity and the financial and non-financial incentives for researchers. The expert contributions in the book deal with implementation of incentive systems at higher education institutions in order to foster innovation. On the other hand, the book also discusses the extent to which governance structures from economy can be transferred to universities and how scientific performance can be measured and evaluated. This book is essential for decision-makers in knowledge-intensive organizations and higher-educational institutions dealing with the topic of performance management.
