Large Stakes and Big Mistakes

@article{citeulike:479241, abstract = {Most upper-management and sales force personnel, as well as workers in many other jobs, are paid based on performance, which is widely perceived as motivating effort and enhancing productivity relative to non-contingent pay schemes. However, psychological research suggests that excessive rewards can in some cases produce supra-optimal motivation, resulting in a decline in performance. To test whether very high monetary rewards can decrease performance, we conducted a set of experiments at MIT, the University of Chicago, and rural India. Subjects in our experiment worked on different tasks and received performance-contingent payments that varied in amount from small to large relative to their typical levels of pay. With some important exceptions, we observed that high reward levels can have detrimental effects on performance.}, author = {Ariely, Dan and Gneezy, Uri and Loewenstein, George and Mazar, Nina }, citeulike-article-id = {479241}, howpublished = {FRB of Boston Working Paper No. 05-11}, keywords = {crowding-out, intrinsic, money, motivation, performance, reward}, month = {July}, posted-at = {2006-01-25 07:50:21}, priority = {2}, title = {Large Stakes and Big Mistakes}, url = {http://papers.ssrn.com/sol3/papers.cfm?abstract\_id=774986}, year = {2005} }

TY - JOUR ID - citeulike:479241 L3 - citeulike-article-id:479241 TI - Large Stakes and Big Mistakes N2 - Most upper-management and sales force personnel, as well as workers in many other jobs, are paid based on performance, which is widely perceived as motivating effort and enhancing productivity relative to non-contingent pay schemes. However, psychological research suggests that excessive rewards can in some cases produce supra-optimal motivation, resulting in a decline in performance. To test whether very high monetary rewards can decrease performance, we conducted a set of experiments at MIT, the University of Chicago, and rural India. Subjects in our experiment worked on different tasks and received performance-contingent payments that varied in amount from small to large relative to their typical levels of pay. With some important exceptions, we observed that high reward levels can have detrimental effects on performance. KW - crowding-out KW - intrinsic KW - money KW - motivation KW - performance KW - reward AU - Ariely, Dan AU - Gneezy, Uri AU - Loewenstein, George AU - Mazar, Nina PY - 2005/07/23/ UR - http://papers.ssrn.com/sol3/papers.cfm?abstract_id=774986 ER -