The Impact of Linking Three Different Incentive Methods to Specific, Challenging Goals

Abstract

Despite a great deal of research investigating incentives and goal setting more broadly, little is known about the linking of goals and goal attainment to different monetary incentive structures, or the manner in which such structural choices impact various job attitudes and job performance. Consequently, a quasi-field experiment, a laboratory experiment, and an on-line survey experiment examined the effects of three monetary incentive systems on task performance (exps. 1, 3), counterproductive behavior (exper. 2), and perceptions of fairness (exps. 1, 3). Additionally, the mediating effect of prolonged effort/persistence (exp. 3) was tested. The results revealed that an all-or-nothing distal goal method of linking a monetary incentive to a goal under-performs the multiple proximal goals and linear piece-rate methods with regard to task performance, counterproductive behavior, and perceptions of fairness. The results of the third experiment revealed that persistence and perceptions of fairness mediate the monetary incentive-task goal performance relationship.