The Effects of Incentives on Workplace Performance: A Meta-analytic Review of Research Studies 1

Abstract

A meta-analytic review of all adequately designed field and laboratory research on the use of incentives to motivate performance is reported. Of approximately 600 studies, 45 qualified. The overall average effect of all incentive programs in all work settings and on all work tasks was a 22% gain in performance. Team-directed incentives had a markedly superior effect on performance compared to individually-directed incentives. This effect was not influenced by the location of the study (business, government, or school), the competitive structure of the incentive system (programs where only the highest performers get incentives versus programs where everyone who increased performance receives incentives), the type of study (whether the study was a laboratory experiment or a field study), or the performance outcome (quality, quantity, or both). In these studies, money was found to result in higher performance gains than non-monetary, tangible incentives (gifts, travel). More research is needed on the relative cost-benefit of cash and gift incentives, and the way different types of tangible incentives are selected. Long-term programs led to greater performance gains than shorter-term programs did, and somewhat greater performance gains were realized for manual than for cognitive work. Explanations based on cognitive psychological principles accompany each of the analyses.

Effect of Training, Compensation and Work Discipline against Employee Job Performance (Studies in the Office of PT. PLN (Persero) Service Area and Network Malang)

“…Employees with good performance can be explained because they feel that the company has provided compensation directly or tidka direct eligible and meet the principles of fairness for employees. These results are consistent with research conducted by Carlson, Upton, and Seaman (2006), Musriha (2009), Condly, Clark, andStolovitch (2008), Nurtjahjani (2008), Wardani (2009) andMahmun (2010). Empirically compensation component consists of salary, incentives, protection, compensation and facilities complement.…”

Can you buy work engagement? The relationship between pay, fringe benefits, financial bonuses and work engagement

“…Although work engagement might be closely related to employees' performance it is not a performance level, but rather a positive work-related state of mind which constitutes work engagement. A wide body of literature suggests that financial rewards may have a positive impact on organizations by increasing employees' performance (Combs et al 2006;Condly et al 2008;Garbers and Konradt 2014). However, we suppose that HRM specialists should be focused not only on improving organizations' performance and effectiveness, but also on increasing and maintaining individual employees' workrelated wellbeing.…”

“…To attract, retain, and motivate employees, organizations all over the globe offer non-financial and financial rewards (Rynes et al 2004;Condly et al 2008;Gerhart and Fang 2014;Shaw and Gupta 2015;Ceschi et al 2017). Financial rewards, which represent rewards with monetary value, might take the form of direct financial rewards (e.g.…”

Relation of Compensation and Benefits on Employees’ Performance: A Study of Audit Firms in Bahrain

“…This article breaks new ground by developing measures for the breadth and depth of employee promotion as well as analyzing the forces at and beyond organization level which shape management choices about which forms to adopt and how to embed them more deeply in organizations. Conversely, the study of Condly (2008) argued that employee promotion provides mixed and sometimes contradictory findings. He further mentioned that the performance effects of employee promotion depend on the business cycle.…”