Feedback and incentives: Experimental evidence

Eriksson, Tor, Poulsen, Anders ORCID: and Villeval, Marie Claire (2009) Feedback and incentives: Experimental evidence. Labour Economics, 16 (6). pp. 679-688.

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This paper experimentally investigates the impact of different pay schemes and relative performance feedback policies on employee effort. We explore three feedback rules: no feedback on relative performance, feedback given halfway through the production period, and continuously updated feedback. We use two pay schemes, a piece rate and a tournament. We find that overall feedback does not improve performance. In contrast to the piece-rate pay scheme there is some evidence of positive peer effects in tournaments since the underdogs almost never quit the competition even when lagging significantly behind, and front runners do not slack off. But in both pay schemes relative performance feedback reduces the quality of the low performers' work; we refer to this as a “negative quality peer effect”.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > School of Economics
UEA Research Groups: Faculty of Social Sciences > Research Centres > Centre for Behavioural and Experimental Social Sciences
Faculty of Social Sciences > Research Groups > Behavioural Economics
Faculty of Social Sciences > Research Groups > Environment, Resources and Conflict
Depositing User: Gina Neff
Date Deposited: 16 Nov 2010 16:02
Last Modified: 14 Jul 2023 15:30
DOI: 10.1016/j.labeco.2009.08.006

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