High-Powered Performance Pay and Crowding Out of Nonmonetary Motives

David Huffman and Michael Bognanno

Management Science, 2018, vol. 64, issue 10, 4669-4680

Abstract: A previous literature cautions that paying workers for performance might crowd out nonmonetary motives to work hard. Empirical evidence from the field, however, has been based on between-subjects designs that are best suited for detecting crowding out due to low-powered incentives. High-powered incentives in the workplace tend to increase output, but it is unknown whether this masks crowding out. This paper uses a within-subject experimental design and finds evidence that crowding out also extends to high-powered incentives in a real work setting with paid workers. There is individual heterogeneity, however, with a minority of workers reporting crowding in of motivation. Thus, the impact of performance pay might depend on the mix of worker types.

Keywords: incentives; noncognitive skills; field experiment; intrinsic motivation (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://doi.org/10.287/mnsc.2017.2846 (application/pdf)

Related works:
Working Paper: High-Powered Performance Pay and Crowding out of Non-Monetary Motives (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:64:y:2018:i:10:p:4669-4680

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().