Please use this form to submit your study for inclusion into our database. It will be checked by a member of the Innovation Growth Lab team, who may be in contact to ask for more information. Your email address * Your name * Title * The name of the study Short summary In the context of a semiconductor factory in Israel, experimenting with different types of incentives yielded results that provide some guidance for organisations trying to motivate their employees, showing that incentives of small magnitude can motivate employees to perform better at low or insignificant cost. Also, simply allowing employees to choose their preferred form of incentive can neutralize the possible negative effect of cash bonuses on intrinsic motivation. A brief description of the project's goals and its current state Abstract <p>The use of short-term bonuses to motivate employees has become an organizational regularity, but a thorough understanding of the relationship between these incentives and actual performance is lacking. We aim to advance this understanding by examining how three types of bonuses (cash, family meal voucher, and verbal reward) affect employees’ productivity in a field experiment conducted in a high-tech manufacturing factory. While all types of bonuses increased performance by over 5%, nonmonetary short-term bonuses had a slight advantage over monetary bonuses. In addition, the removal of the bonuses led to decreased productivity for monetary bonuses but not for the verbal reward. However, this negative effect of monetary short-term bonuses diminishes when a cash bonus is chosen by employees rather than granted by default. Theoretical implications about the effect of short-term bonuses on intrinsic motivation and reciprocity, as well as practical applications of short-term bonus plans that stem from our findings, are discussed.</p> The full abstract of the study, if available Links http://jom.sagepub.com/content/early/2014/05/09/0149206314535441.full.pdf+html Links to any published papers and related discussions Authors * Affiliations Academic and other institutes that the authors of the study are members of Delivery partner Organisations involved in delivering the trial, if appropriate Year Year Year199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023202420252026 Month MonthJanFebMarAprMayJunJulAugSepOctNovDec Day Day12345678910111213141516171819202122232425262728293031 Journal Journal publishing the study, if available Publication stage * Working Paper Published Ongoing Research Forthcoming Discussion Paper Research theme * Entrepreneurship Innovation Business Growth Country Country or countries where this study took place. Topics What sort of topics does the study cover? Sample attributes Hypotheses / research question Hypothesis 1: Productivity will increase when short-term bonuses are introduced. Hypothesis 2: The effectiveness of short-term bonuses should increase as bonuses become less fungible. Specifically, verbal rewards should have the strongest effect on productivity and cash should have the weakest effect. Hypothesis 3a: Once the bonuses are administered (and performance is no longer incentivised) productivity will decrease. Hypothesis 3b: Even after the bonuses are administered, productivity will remain high. Hypothesis 4: Monetary short-term bonuses will have a negative effect on productivity after the bonuses have been administered. This negative effect is expected to be mitigated for verbal rewards and when employees have control over the type of bonus that they receive. Hypothesis 5: Absenteeism will decrease during the initiation of the short-term bonuses programme. This positive effect of the bonuses on employees' withdrawal behaviour will persist after the incentive plan ends. Sample Trial population and sample selection The experiment was executed within a semiconductor factory at a large global technological company. Participants were 156 technicians (118 male) at a global high-tech semiconductor company working at a fabrication plant in Israel. Age ranged from 24 to 57 years, and tenure varied from 1 months to 20.5 years. The technicians were selected for the study because their productivity depends solely on personal performance, without the complication of external uncontrolled factors. During the experiment, participants engaged in their regular jobs composed of standard 12-hour shifts, followed by 4 days off. Number of treatment groups Size of treatment groups 39 employees each Size of control group Unit of analysis Clustered? Yes No Cluster details Trial attributes Treatment description The experiment was conducted over a 5-week period in April and May of 2012. The treatment introduced an incentive bonus plan. Three types of bonuses were administered in four within-subjects conditions. In the cash condition, the bonus was a monetary prize; in the pizza meal condition, the bonus was a family pizza meal voucher; in the verbal reward condition, the bonus was an acknowledgement for a job well done; in the choice condition, employees could choose between cash and the pizza meal voucher for their bonus. The monetary and pizza meal condition were worth approximately equal values. Employees were randomly assigned to four groups with 39 employees in each, and each group was offered all four types of bonuses on different weeks in a random order. At the beginning of each work cycle, employees were informed by their supervisor that they would receive an incentive bonus the next day if their performance level exceeded the base productivity criterion. Rounds of data collection Baseline data collection and method Factory data was collected on employee productivity and absenteeism. Baseline data includes the 3 weeks worth of data prior to the intervention. Data collection method and data collected Evaluation Outcome variables <p>Bonus administration, productivity, absenteeism.</p> Results <p>Both monetary and nonmonetary short-term bonuses increase performance, even when they are of a small magnitude. Surprisingly, there was no difference between the types of bonuses. When the bonuses were no longer active, overall productivity decreased, and for monetary rewards, this reduction reached far below the level of base productivity.</p> Intervention costs Not available. Cost benefit ratio Reference Bareket-Bojmel, L., Hochman, G., & Ariely, D., 2014. 'It’s (Not) All About the Jacksons Testing Different Types of Short-Term Bonuses in the Field'. Journal of Management, 0149206314535441. Citation for use in academic references
