Is there folly when worker A is more productive than worker B? : examining heterogeneous responses to individual and group performance pay
Name
1132233734-MIT.pdf
Size
4.16 MB
Format
Adobe PDF
Checksum (MD5)
6c09154b197fb935dede79960998ea71
Author(s)
Kowalski. Alexander Marion.
Advisor(s)
Thomas Kochan.
Alternative Title
Examining heterogeneous responses to individual and group performance pay
Date Issued
2019
Publisher
Massachusetts Institute of Technology
Abstract
Although it is commonly suggested that employees of different ability levels respond in different ways to performance pay, there is little research documenting such a relationship. In this study, I examine how employee ability moderates the effectiveness of two types of incentives in a field experiment with warehouse workers at Picklnc, a large U.S.-based retailer. The incentives are distinguished by their level of reward: one is tied to individual performance, the other to group performance. I find, first, that the individual incentive is superior in improving productivity and, second, that there is variation in how employees of different ability levels respond. The relationship between individual performance pay and ability is J-shaped: weak performers respond most positively, followed by top performers, followed by middle performers. Group performance pay is negatively related to ability. The results suggest that more effective performance pay systems will need to account for variability in employee response.
Description
Thesis: S.M. in Management Research, Massachusetts Institute of Technology, Sloan School of Management, 2019
Cataloged from PDF version of thesis.
Includes bibliographical references (pages 40-42).
Subjects
Sloan School of Management.
MIT Department
Sloan School of Management
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