In two experiments, we examine whether performance-contingent incentives facilitate the creative process by enhancing the initial preparation that precedes creative incubation. The defining characteristic of both experiments is a second-stage task that is separated in time from the first-stage implementation of different incentive schemes. In Experiment 1, the second stage takes place ten days after we implement conditions with quantity incentives, high-creativity incentives, incentives with a minimum-creativity threshold, and a fixed-pay control condition. In Experiment 2, we test the effects of incentives with an incubation period of 20 minutes, during which an experimenter escorts participants on a walk between compensated work periods. In both experiments, we find that participants with quantity incentives outperform the high-creativity production of their fixed-pay counterparts only in the second-stage task. Mediation analyses suggest that quantity-incentivized participants' propensity to try more divergent ideas in the first stage sparks their creativity advantage in the second stage. JEL Classifications: D24; D91; M11; M41.

I use a laboratory experiment to examine the productive and counterproductive effects of providing employees nonpecuniary recognition based on measures of relative performance. I find that, on average, recognition programs increase both productive efforts (those intended to increase one's own performance) and counterproductive efforts (those intended to decrease peer performance) in a setting where it is salient to employees that they can exert both productive and counterproductive efforts. Interestingly, I also find that these effects are moderated by the Dark Triad of personalities, a group of three personality traits. My study reveals that recognition programs mainly lead individuals who score lower on the Dark Triad to increase counterproductive efforts and those who score higher on the Dark Triad to increase productive efforts. These results contribute to the literature on relative performance information by demonstrating that recognition programs can have both productive and counterproductive effects. However, whether these programs produce mainly a productive or counterproductive effect depends on important personality characteristics of the employees. * Accepted by Khim Kelly. This paper is based on my dissertation. I gratefully acknowledge the encouragement and guidance from my committee members, a accroître leurs efforts contre-productifs et les personnes dont la note est plus elev ee a cette même evaluation a accroître leurs efforts productifs. Ces r esultats enrichissent les ecrits sur l'information touchant la performance relative en d emontrant que les programmes de reconnaissance peuvent avoir a la fois des effets productifs et contre-productifs. La nature productive ou contre-productive des efforts qu'engendrent principalement ces programmes d epend toutefois des caract eristiques importantes de la personnalit e des employ es.Recognizing the Best 967

Many organizations whose core purpose is to advance a social mission pay employees below-market wages. We investigate two under-appreciated benefits of below-market pay in these social-mission organizations. In a series of experiments, we predict and find that, holding employees' outside opportunities constant, those attracted to social-mission organizations that pay below-market wages perform better individually and cooperate more effectively in teams than those attracted to social-mission organizations that pay higher wages. The individual performance effect arises because below-market pay facilitates the selection of value-congruent employees who are naturally inclined to work hard for the organizational mission. The team cooperation effect arises because employees expect team members who have selected a social-mission job that pays below market to be more value-congruent and, therefore, more cooperative than those who have selected a social-mission job that pays higher wages. Collectively, we demonstrate that in social-mission organizations, offering below-market pay can yield selection benefits.

We investigate a potential selection benefit of stock-based compensation for rank-and-file employees, whose pay under this compensation form is insensitive to their individual efforts. We use a laboratory experiment to demonstrate that individuals with higher levels of dispositional optimism are more likely to choose compensation that is contingent on a company's future stock price than to choose fixed pay, even after controlling for the individual's risk preferences. Furthermore, compared to participants selecting fixed pay, those selecting stock-based compensation also perform better on a challenging problem-solving task, a result that we show is due to their higher levels of dispositional optimism. Collectively, we demonstrate that stock-based compensation can have productivity-enhancing effects, even if stock prices are completely insensitive to individual efforts. In doing so, we provide a partial explanation for the puzzling prevalence of stock-based compensation plans at the rank-and-file level and contribute to the broader contract-selection literature.

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