Creativity under Pressure: Performance Payments, Task Type and Productivity*

Joaquin Artes, Jennifer Graves and Meryl Motika
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Meryl Motika: Division of Social Science

No 20190028, Working Papers from New York University Abu Dhabi, Department of Social Science

Abstract: When incentivizing a worker with performance pay, does the effectiveness of the pay type used vary by the type of task being completed? To answer this question, we run an experiment to test the task-specific productivity effects of various types of performance-based payments, each intended to incentivize productivity. The incentives we use are competition, high-stakes pay, time pressure and piece rate pay, each evaluated against a non-performance-based flat rate payment. Each of these incentives are applied in situations with participants completing three types of tasks: a routine task, a purely creative task and a creative problem-solving task. By testing these various tasks and pressures in the same experimental design, we are able to make comparisons across task types that have not been possible in previous studies. Our results show that productivity indeed does differ across task type and incentive combinations. We find that, for routine tasks, all incentivizing payment schemes improve productivity relative to flat rate payment. In contrast, for both the purely creative and the creative problem-solving tasks, none of the payment types of piece rate, timed goals nor high stakes pay impact productivity relative to a flat rate payment, with the high pay incentive even decreasing performance on the problemsolving task. We find competition to be the one incentive-based pay scheme that boosts productivity. Participants performed as well or better under competition across all task types, with a notable increase in their performance on pure creative tasks.

Pages: 67 pages
Date: 2019-10, Revised 2019-10
New Economics Papers: this item is included in nep-cbe, nep-eff, nep-exp, nep-hrm and nep-neu
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