Goal Setting and Monetary Incentives: When Large Stakes Are Not Enough

Joaquín Gómez-Miñambres (), Brice Corgnet and Roberto Hernán-Gonzalez ()
Additional contact information
Joaquín Gómez-Miñambres: Bucknell University
Roberto Hernán-Gonzalez: Nottingham University Business School
Authors registered in the RePEc Author Service: Roberto Hernán González

No 1305, Working Papers from Departament Empresa, Universitat Autònoma de Barcelona

Abstract: The aim of this paper is to test the effectiveness of wage-irrelevant goal setting policies in a laboratory environment. In our design, managers can assign a goal to their workers by setting a certain level of performance on the work task.We establish our heoretical conjectures by developing a model where assigned goals act as reference points to workers’ intrinsic motivation. Consistent with our model,we find that managers set goals which are challenging but attainable for an average-ability worker. Workers respond to these goals by increasing effort, performance and by decreasing on-the-job leisure activities with respect to the no-goal setting baseline. Finally, we study the interaction between goal setting and monetary rewards and find that goal setting is most effective when monetary incentives are strong. These results suggestthat goal setting may produceintrinsic motivation and increas eworkers’performance beyond what is achieved using solely monetary incentives.

Keywords: : Intrinsic motivation; incentives; goal-setting; reference dependent preferences. (search for similar items in EconPapers)
JEL-codes: C92 D23 M54 (search for similar items in EconPapers)
Pages: 58pages
Date: 2013-04, Revised 2013-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published in Working Papers at the Department of Business, June pages 1-58

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Related works:
Journal Article: Goal Setting and Monetary Incentives: When Large Stakes Are Not Enough (2015)
Working Paper: Goal Setting and Monetary Incentives: When Large Stakes Are Not Enough (2015)
Working Paper: Goal Setting and Monetary Incentives: When Large Stakes Are Not Enough (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:bbe:wpaper:1305

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