Goal setting and monetary incentives: when large stakes are not enough

• "Gómez Miñambres, Juan Carlos ^[1] ; Corgnet null, Brice ^[1] ; Hernán González, Roberto ^[2]
  1. [1] Chapman University

     Chapman University

     Estados Unidos

     
  2. [2] Universidad de Granada

     Universidad de Granada

     Granada, España

     
• Localización: Documents de Treball ( Universitat Autònoma de Barcelona. Departament d'Economia de l'Empresa ), ISSN-e 1988-7736, Nº. 5, 2013
• Idioma: inglés
• Enlaces
  • Texto completo
• Resumen

  • The aim of this paper is to test the effectiveness of wage-irrelevant goal setting policies in a laboratory environment. In our design, managers can assign a goal to their workers by setting a certain level of performance on the work task. We establish our theoretical conjectures by developing a model where assigned goals act as reference points to workers' intrinsic motivation. Consistent with our model, we find that managers set goals which are challenging but attainable for an average-ability worker. Workers respond to these goals by increasing effort, performance and by decreasing on-the-job leisure activities with respect to the no-goal setting baseline. Finally, we study the interaction between goal setting and monetary rewards and find that goal setting is most effective when monetary incentives are strong. These results suggest that goal setting may produce intrinsic motivation and increase workers' performance beyond what is achieved using solely monetary incentives.