American Economic Review Vol. 87 No. 3 1997
Productivity Under Group Incentives: An Experimental Study
Abstract
This paper presents an experimental examination of a variety of group incentive programs. We investigate simple revenue sharing and more sophisticated, target-based systems such as profit sharing or productivity gainsharing, as well as tournament-based and monitoring schemes. Our results can be characterized by three facts: (1) history matters; how a group performs in one incentive scheme depends on its history together under the scheme that preceded it; (2) relative performance schemes outperform target-based schemes; and (3) monitoring can elicit high effort from workers, but the probability of monitoring must be high and, therefore, costly.
- Volume
- 87
- Issue
- 3
- Pages
- 314-341
- Sources
- bibtex:phds-export.bib