Hidden Benefits of Reward: A Field Experiment on Motivation and Monetary Incentives

We conduct a field experiment in a controlled work environment to investigate the effect of motivational talk and its interaction with monetary incentives. We find that motivational talk significantly improves performance only if it is accompanied by performance pay. Moreover, performance pay reduces performance unless it is accompanied by motivational talk. By adding motivational sentences to an otherwise neutral explanation of the work task, the effect of performance pay goes from slightly negative to significantly positive. Hence, we find what we call a hidden benefit of monetary rewards: complementarity between performance pay and motivational talk.

• Publication year

  2015

• Venue

  Social Science Research Network

• Publication date

  2015-05-01

• Fields of study

  Economics, Psychology

• Identifiers
  DOI 10.1016/J.EUROECOREV.2015.03.003
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

• Organizational behavior.

  2021cited by this paper
• Let's Talk: How Communication Affects Contract Design

  2016cited by this paper
• Are firms paying more for performance

  2016cited by this paper
• Training and development

  2015cited by this paper
• Legitimacy, Communication, and Leadership in the Turnaround Game

  2015cited by this paper
• Incentives to Motivate

  2015cited by this paper
• Knowing that You Matter, Matters! The Interplay of Meaning, Monetary Incentives, and Worker Recognition

  2014cited by this paper
• Bankers and Their Bonuses

  2014cited by this paper
• Crowding Out in the Labor Market: A Prosocial Setting Is Necessary

  2014cited by this paper
• Punish and Voice: Punishment Enhances Cooperation when Combined with Norm-Signalling

  2013cited by this paper
• The Currency of Reciprocity - Gift-Exchange in the Workplace

  2012cited by this paper
• Respect and relational contracts

  2012cited by this paper
• Getting More Work for Nothing? Symbolic Awards and Worker Performance

  2011cited by this paper
• Motivation and monetary incentives : A closer look

  2010cited by this paper
• A little thanks goes a long way: Explaining why gratitude expressions motivate prosocial behavior.

  2010cited by this paper
• Book Review: Pink, D.H. (2009). Drive: The Surprising Truth about What Motivates Us

  2010cited by this paper
• In search of worker's real effort reciprocity: A field and a laboratory experiment

  2010cited by this paper
• Can Field Experiments Return Agricultural Economics to the Glory Days

  2009cited by this paper
• Book Review DRIVE: The Surprising Truth About What Motivates Us

  2009cited by this paper
• An introduction to field experiments in economics

  2009cited by this paper
• The significance of task significance: Job performance effects, relational mechanisms, and boundary conditions.

  2008cited by this paper
• Field Experiments in Economics: the Past, the Present, and the Future

  2008cited by this paper
• Man's search for meaning: The case of Legos

  2008cited by this paper
• Reciprocity and Incentive Pay in the Workplace

  2008influential reference
• Pay—but do not pay too much: An experimental study on the impact of incentives

  2008cited by this paper
• Work-related perks, agency problems, and optimal incentive contracts

  2008cited by this paper
• Pride and Prejudice: The Human Side of Incentive Theory

  2008influential reference
• NBER WORKING PAPER SERIES PERFORMANCE PAY AND WAGE INEQUALITY

  2007cited by this paper
• The Impact of Salesperson Motivation on Role Perceptions and Job Performance—A Cognitive and Affective Perspective

  2007cited by this paper
• Field Experiments: A Bridge between Lab and Naturally Occurring Data

  2007cited by this paper
• Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes

  2006cited by this paper
• Clean Evidence on Peer Effects

  2006cited by this paper
• Incentives and Prosocial Behavior

  2006influential reference
• Field Experiments in Economics

  2005cited by this paper
• IT'S WHAT YOU SAY, NOT WHAT YOU PAY: AN EXPERIMENTAL STUDY OF MANAGER-EMPLOYEE RELATIONSHIPS IN OVERCOMING COORDINATION FAILURE

  2005cited by this paper
• Self‐determination theory and work motivation

  2005cited by this paper
• COMBINING MONETARY AND SOCIAL SANCTIONS TO PROMOTE COOPERATION

  2005cited by this paper
• Piece Rates, Fixed Wages and Incentives: Evidence from a Field Experiment

  2004cited by this paper
• Promises, Threats and Fairness

  2004cited by this paper
• Detrimental effects of sanctions on human altruism

  2003cited by this paper
• Behavioral management and task performance in organizations: Conceptual background, meta-analysis, and test of alternative models.

  2003cited by this paper
• Intrinsic and Extrinsic Motivation

  2003influential reference
• Promises & Partnership

  2002cited by this paper
• Consequences of sales management control in field sales organizations: a cross-national perspective

  2002cited by this paper
• More Order with Less Law: On Contract Enforcement, Trust, and Crowding

  2001influential reference
• More Order with Less Law: On Contract Enforcement, Trust and Crowding

  2000cited by this paper
• Pay Enough or Don't Pay at All

  2000cited by this paper
• A Fine is a Price

  2000cited by this paper
• Reinventing Training and Development

  1998cited by this paper
• The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out

  1997cited by this paper
• Examining the Role of Organizational Variables in the Salesperson Job Satisfaction Model

  1996cited by this paper
• Reinforcement, Reward, and Intrinsic Motivation: A Meta-Analysis

  1994cited by this paper
• 1001 ways to reward employees

  1994cited by this paper
• Intrinsic motivation.

  1990cited by this paper
• The Hidden costs of reward : new perspectives on the psychology of human motivation

  1978cited by this paper
• Effects of Externally Mediated Rewards on Intrinsic Motivation.

  1971cited by this paper
• Man's Search for Meaning

  1946cited by this paper
• Journal of Economic Perspectives—Volume 25, Number 4—Fall 2011—Pages 191–210 When and Why Incentives (Don’t) Work to Modify Behavior

  year unknowncited by this paper

• The Value of Leadership: Evidence from a Large-Scale Field Experiment

  2025cites this paper
• Motivational investments and financial incentives

  2025influential citation
• Complementarity in human-AI collaboration: concept, sources, and evidence

  2024cites this paper
• Efficiency wages with motivated agents

  2024cites this paper
• Effective leadership across economic contexts

  2024cites this paper
• At the Helm, Kirk or Spock? The Pros and Cons of Charismatic Leadership

  2023cites this paper
• An exploratory analysis of incentive packages and managerial performance

  2023cites this paper
• Changing social attitudes with virtual reality: a systematic review and meta-analysis

  2022cites this paper
• On the Influence of Cognitive Styles on Users' Understanding of Explanations

  2022cites this paper
• Digital leadership: Motivating online workers

  2022cites this paper
• Motivation in a Reciprocal Task: Interaction Effects of Task Meaning, Goal Salience, and Time Pressure

  2022cites this paper
• Talking About Performance or Paying for It? A Field Experiment on Performance Reviews and Incentives

  2022cites this paper
• Little Lies and Blind Eyes – Experimental Evidence on Cheating and Task Performance in Work Groups

  2022cites this paper
• Reward Salience and Choice in a Controlling Context: A Lab Experiment

  2022cites this paper
• Leadership Styles and Labor-Market Conditions

  2021cites this paper
• Leadership Styles and Labor Market Conditions

  2021cites this paper
• How (not) to motivate online workers: Two controlled field experiments on leadership in the gig economy

  2021cites this paper
• “Just Words? Just Speeches?” On the Economic Value of Charismatic Leadership

  2021cites this paper
• Intrinsic Rewards and Employee's Performance With the Mediating Mechanism of Employee's Motivation

  2021cites this paper
• Designing a Laboratory-Based Behavioral Experiment

  2021cites this paper
• Behavioral Aspects of Communication in Organizations

  2020cites this paper
• Human vs. supervised machine learning: Who learns patterns faster?

  2020cites this paper
• Ideenmanagement

  2020cites this paper
• Labor-Market Conditions and Leadership Styles

  2020cites this paper
• The Effect of Stress and Work Overload on Employee’s Performance: A Case Study of Public Sector Universities of Khyber Pakhtunkhwa

  2020cites this paper
• Needmining: identifying micro Blog Data containing Customer Needs

  2020cites this paper
• The impact of the non-financial incentives in employees in the public sector in Norway

  2019cites this paper
• Literature vs. Twitter: Empirical insights on customer needs in e-mobility

  2019cites this paper
• The role of risk preferences and loss aversion in farmers’ energy-efficient appliance use behavior

  2019cites this paper
• Motivation and Incentives in an Online Labor Market

  2019cites this paper
• Employees perception on effective reward system and motivating incentives to enhance performance in Irish owned restaurants: A case study of reward management system in Comet Restaurant Dublin

  2019cites this paper
• Supporting customer-oriented marketing with artificial intelligence: automatically quantifying customer needs from social media

  2019cites this paper
• The impact of monetary rewards for online reviews

  2019cites this paper
• Increasing perseverance in math: Evidence from a field experiment in Norway

  2018cites this paper
• The Effect of Public Recognition on Performance in Competitive Environments

  2018cites this paper
• Does Doing Good Mean Doing Better? Influence of CSR Implementations on Employee Work Motivation in Organizations

  2018cites this paper
• Produktivitet og insentiver i offentlig sektor

  2018cites this paper
• Non-Competitive Wage-Setting as a Cause of Unfriendly and Inefficient Leadership

  2018cites this paper
• Automatically Quantifying Customer Need Tweets: Towards a Supervised Machine Learning Approach

  2018cites this paper
• Monetary Incentives and Adolescent Males' Athletic Performance

  2018influential citation
• Managing Employees 'Insides' to Remedy Agency Problems? A Model of Transformational Leadership

  2018cites this paper
• The Effects of Financial and Recognition Incentives Across Work Contexts: The Role of Meaning

  2017cites this paper
• Cash or Credit? Compensation in Psychology Studies: Motivation Matters

  2017cites this paper
• The effect of less autonomy on performance in retail: Evidence from a quasi-natural field experiment

  2017cites this paper
• The Magic of the Personal Touch: Field Experimental Evidence on Money and Appreciation as Gifts*

  2016influential citation
• Feedback and Performance: Experiments in Behavioral Economics

  2016cites this paper
• Going to work or staying at home? How kindergarten stakeholders perceive determinants of job performance, job presence and work health

  2015cites this paper
• The neglected cost of incentivizing? A meta-analysis of subject performance vs. cost-efficiency

  2015cites this paper
• Incentives to Motivate

  2015cites this paper
• At the Helm, Kirk or Spock? The Pros and Cons of Charismatic Leadership

  2014cites this paper