The effects of monetary incentives on worker learning and performance in an assembly task

Accountants are concerned about the impact of incentive contracts on performance. Monetary incentives improve overall performance, but their effects on the components of performance are not well known. Performance on a repetitive task includes initial performance, subsequent improvement rate and per...

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Bibliographic Details
Published in:Journal of management accounting research 1998-01, Vol.10, p.119
Main Authors: Bailey, Charles D, Brown, Lawrence D, Cocco, Anthony F
Format: Article
Language:English
Subjects:
Accountants
Hypotheses
Impact analysis
Incentives
Laboratories
Learning curves
Literature reviews
Management accounting
Monetary incentives
Motivation
Research methodology
Studies
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Summary:Accountants are concerned about the impact of incentive contracts on performance. Monetary incentives improve overall performance, but their effects on the components of performance are not well known. Performance on a repetitive task includes initial performance, subsequent improvement rate and performance after learning ceases. Monetary incentives can affect any of these factors. A study examines the impact of piece-rate and goal-contingent incentives versus fixed-pay, on initial performance and subsequent improvement rate in an assembly task. Both overall and initial performance, but not improvement rate, are higher in the incentive-pay groups. Two factors may explain the lack of differential improvement rates: subjects' effort allocation, since improving initial performance may be easier than improving subsequent performance; and the nature of these typical incentive-pay plans, which do not reward improvement directly.
ISSN:1049-2127
1558-8033