Performance Monitoring and the Incentives for Exertion of Effort

Yevgeny Mugerman, Eyal Winter and Tomer Yafeh
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Eyal Winter: Federmann Center for the Study of Rationality, The Hebrew University of Jerusalem, Jerusalem, Israel3Department of Economics, The Hebrew University of Jerusalem, Jerusalem, Israel
Tomer Yafeh: Federmann Center for the Study of Rationality, The Hebrew University of Jerusalem, Jerusalem, Israel4Business School, The Hebrew University of Jerusalem, Jerusalem, Israel

Quarterly Journal of Finance (QJF), 2024, vol. 14, issue 02, 1-19

Abstract: This paper investigates the impact of monitoring intensity on individuals’ motivation to exert effort. Using an experimental approach, we designed a test comprising six problems, with varied levels of monitoring and success criteria, to evaluate performance as an indicator of effort. The results reveal a nonlinear relationship between the stringency of monitoring criteria and worker performance. Interestingly, we found that optimal performance is attained when participants are required to answer correctly only one of the six problems. This study enhances our understanding of performance monitoring strategies and their effects in modern work settings.

Keywords: Performance monitoring; experimental economics; employee motivation; incentive structures; success criteria in performance tests (search for similar items in EconPapers)
JEL-codes: C91 D91 J24 M12 M52 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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DOI: 10.1142/S2010139224400056

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