When Bonuses Backfire: Evidence from the Workplace

Jakob Alfitian (), Dirk Sliwka () and Timo Vogelsang ()
Additional contact information
Jakob Alfitian: Faculty of Management, Economics, and Social Sciences, University of Cologne, 50923 Cologne, Germany
Dirk Sliwka: Faculty of Management, Economics, and Social Sciences, University of Cologne, 50923 Cologne, Germany
Timo Vogelsang: Frankfurt School of Finance & Management, 60322 Frankfurt, Germany

Management Science, 2024, vol. 70, issue 9, 6395-6414

Abstract: Monetary incentives are widely used to align employee actions with employer objectives. We conducted a field experiment in a retail chain to evaluate whether an attendance bonus could reduce employee absenteeism. Apprentices in 232 stores were randomly assigned to a control group or one of two treatment groups in which a monetary or time-off attendance bonus was introduced for one year. We find that neither variant of the attendance bonus led to a systematic reduction in absenteeism. On the contrary, the monetary attendance bonus increased absenteeism substantially by around 50% on average, which corresponds to more than five additional days absent per employee and year. This effect was driven by the most recently hired apprentices. Survey results reveal that the monetary attendance bonus shifted the perception of absenteeism as acceptable behavior. The backfiring effect persisted beyond the end of the experiment, indicating a lasting erosion of social norms.

Keywords: compensation; monetary incentives; social norms; absenteeism; crowding out; field experiment (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.2022.00484 (application/pdf)

Related works:
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:70:y:2024:i:9:p:6395-6414

Access Statistics for this article

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