In this paper we test whether procrastination and planning problems affect the performance, compensation and work satisfaction among employees. We conducted a randomized controlled experiment with a bank in Colombia to change the frequency and intensity with which employees received reminders about goal achievements. We also provided small in-kind prizes every week to remind employees of their goal achievement. Loan officers in the treatment group showed strong improvements in their goal achievements, better workload distribution, and higher monthly compensation (not including the value of the small prizes). The intervention also improved worker satisfaction and reduced stress levels, without affecting the quality of the loan officers' portfolios. We show that including branch managers (the supervisors of the loan officers) in the intervention was central in achieving these results, since they played a key role in reinforcing the reminders and helping employees with planning problems.
Performance: number of loan officers in each branch achieving weekly targets, Gap Indicator (distance from ideal distribution of loan sourcing across the month). Productivity: Monthly productivity, productivity for weeks 1 & 2, productivity for weeks 3 & 4. Delinquency rates: Current delinquency rates, future delinquency rates (2 months out). Individual compensation: Salary + bonus. Well-being / Satisfaction levels / Planning / Stress levels: Reported work satisfaction levels, reported compensation satisfaction levels, reported ability to make and adhere to a plan, reported planning levels, reported percentage of time feeling stressed at work.
Loan officers in the treatment branches show a significant improvement in their task allocation, as well as job satisfaction and stress levels. Achievement of goals during the first two weeks of the month improved by 30%. Sourcing of new loans increased by an average of 18%, and renewal loans by an average of 10% in the first two weeks of each month. There was a substantial positive impact on individual compensation through incentives: on average, compensation increased by 25% per month. Treatment also lead to loan officers reporting a significant increase in job satisfaction and reduction in stress levels. Overall, there was no significant change in the level of new loans per month, but a strong shift toward the ideal distribution of loan sourcing and allocation of tasks throughout the month. The shift lead to no change in credit quality. Importantly, the effects disappeared after the intervention was stopped at the end of the experiment, indicating that the effects are indeed tied to the reminders.