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

Corgnet, Brice; Gómez‐Miñambres, Joaquín; Hérnan-Gonzalez, Roberto

doi:10.1287/mnsc.2014.2068

Cited by 95 publications

(71 citation statements)

References 40 publications

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“…The field experiment also provides some interesting insights into the differences between self-chosen and assigned goals and on the effects of the difficulty of the goal [5]. While self-chosen and assigned goals led to the same increase in average productivity, they led to different distributions of outputs.…”

Section: Self-chosen or Assigned Goals And Accuracy Of Goal Settingmentioning

confidence: 97%

“…First, they are extrinsically motivated by the wages they receive, and second, they are intrinsically motivated to reach their personal goals. Consequently, goals provide a reference point against which workers can measure their satisfaction (utility) by dividing outcomes into gains, when the goal is attained, and losses, when output falls below the goal [2], [3], [4], [5]. In line with prospect SebaStian J. GoerG | Goal setting and worker motivation…”

Section: Positive Effects Of Goalsmentioning

confidence: 99%

“…However, even goals that are not linked to monetary rewards can be very effective in increasing productivity. In a recent laboratory experiment, subjects in the role of workers had to engage in a laborious mathematics task requiring close effort for 1.5 hours [5]. Each correct solution generated revenue that was split equally between the worker and a manager.…”

Section: Increased Productivitymentioning

confidence: 99%

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Goal setting and worker motivation

Goerg

2015

izawol

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in eLeVator PitCHEmployers want motivated and productive employees. Are there ways to increase employee motivation without relying solely on monetary incentives, such as pay-for-performance schemes? One tool that has shown promise in recent decades for improving worker performance is setting goals, whether they are assigned by management or self-chosen. Goals are powerful motivators for workers, with the potential for boosting productivity in an organization. However, if not chosen carefully or if used in unsuitable situations, goals can have undesired and harmful consequences. Goals are a powerful tool that needs to be applied with caution. aUtHor'S Main MeSSaGeEmpirical field and laboratory studies demonstrate that well-chosen work goals, whether assigned or self-chosen, can increase employee productivity, with and without monetary incentives. Goals are most productive in simple work environments, where productivity is defined along a single dimension of effort, such as output quantity, and where chances for adverse behavior are low. In more complex environments, multidimensional goal setting is harder to get right and can lead to undesirable behavior and ultimately to lower quality. Broader organizational objectives should be communicated to workers to avoid too narrow a focus on some goals. ConsGoals that focus solely on output quantity can lead to lower quality outputs. If assigned goals are too ambitious, excessive risk taking may result. Work goals that are based on the output of individual workers can reduce cooperation among workers. Goals can encourage unethical behavior and lead to overcharging and misreporting of performance measures. Many of the caveats that apply to monetary incentives also apply to goal setting. Goal setting and worker motivationIndividual work goals can increase a worker's performance, but they need to be chosen wisely

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Section: Self-chosen or Assigned Goals And Accuracy Of Goal Settingmentioning

confidence: 97%

Section: Positive Effects Of Goalsmentioning

confidence: 99%

Section: Increased Productivitymentioning

confidence: 99%

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Goal setting and worker motivation

Goerg

2015

izawol

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“…First, it relates to the literature highlighting the effectiveness of various forms of non-monetary incentives on workers motivation (Deci (1971); Frey and Jegen (2001) ;Gneezy, Meier, and Rey-Biel (2011)). Examples of effective non-monetary incentives are goals (Wu, Heath, and Larrick (2008); Goerg and Kube (2012); Gómez-Miñambres (2012) ;Corgnet, Gómez-Miñambres, and Hernán-Gonzalez (2015)), interpersonal ties (Bandiera, Barankay, and Rasul 2010), symbolic awards (Kosfeld and Neckermann (2011), authority (Fehr, Herz, and Wilkening (2013)) and autonomy (Falk and Kosfeld (2006)). We contribute to this literature by showing unique evidence of the role of moral support as a novel non-monetary incentive to increase workers performance.…”

Section: Related Literaturementioning

confidence: 99%

You'll Never Walk Alone: The Effect of Moral Support on Performance

2018

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This study presents evidence on the role of moral support on performance in a competitive environment. We take advantage of an unusual change in the Argentinean football legislation. In August 2013, as a matter of National security, the Argentinean government forced all the teams of the first division to play their games with only home team supporters. Supporters of the visiting teams were not allowed to be in stadiums during league games. We estimate the effect of this exogenous variation of supporters on team performance, and we find that visiting teams are, on average, about 20% more likely to lose without their supporters. Moreover, we find that the lack of supporters of the visiting team increased the score differential between the home team and the visitor. The effect of the ban is stronger for big teams, who have the highest number of supporters when playing away. In addition, we find no evidence of changes of referees' decisions due to the ban, suggesting that the effect on team performance is due to the loss of moral support rather than a change in referees hostility. As placebo test, we run the analysis using contemporaneous cup matches, where the visiting team supporters were allowed to attend. We find no effect of the ban on the cup games, which provides additional empirical support to our findings. Our results offer unique and novel empirical evidence of the importance on moral support on performance.JEL: D01, D91, J24.

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“…Research on goal setting states that a challenging goal set by the principal can boost the agent's performance (Wu et al, 2008;Corgnet et al, 2015). Besides, theoretical models have shown that personal goals could address self-control problems that stem from present-biased preferences Nafziger, 2009, 2011), and empirical evidence has shown that binding personal goals could be motivating and lead to high performance levels as compared to contracts that carry comparable monetary rewards (Dalton et al, 2015;Goerg and Kube, 2012).…”

Section: Introductionmentioning

confidence: 99%

Believe Me, You are (Not) that Bad

Jimenez

2016

SSRN Journal

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This paper studies the effect of incentive schemes incorporating status classes on workers' performance. I focus on performance comparisons between similarly skilled workers that belong to different status classes. A theoretical framework predicts that, under certain conditions, low ability workers attain high performance when they are assigned to a high rather than a low status class, and that high ability workers achieve high performance irrespective of the received status. These predictions are tested in a laboratory setting, where subjects are randomly assigned to a high status or a low status condition and constant performance feedback is provided. The experimental data support both predictions: low ability subjects assigned to the high status condition outperform their low status counterparts by 0.53 standard deviations in a cognitively challenging task, and high ability subjects display high performance outcomes in both status classes. Moreover, I explore the subjects' beliefs about performance as a mechanism to explain these results. I find that low ability subjects assigned to the high status exhibit performance targets that were as high as those elicited by high ability participants. This suggests that these workers used status to believe that they were good performers, and performed accordingly.JEL Classification : D03, C91, D84, M54, Z13

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

Cited by 95 publications

References 40 publications

Goal setting and worker motivation

Goal setting and worker motivation

You'll Never Walk Alone: The Effect of Moral Support on Performance

Believe Me, You are (Not) that Bad

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