Work Productivity as a Function of the Percentage of Monetary Incentives to Base Pay

Abstract

In many individual monetary incentive systems workers receive an hourly base pay and can earn incentives when productivity exceeds a specified standard. The total amount that can be earned in incentives is often expressed as a percentage of base pay. This study examined the effects of different percentages of incentive pay to base pay on work productivity. Seventy-five college students were randomly assigned to one of five incentivebase pay conditions: 0% (no incentives), l0%, 30%. 60% or 100%. Subjects participated in 15 forty-five minute sessions during which they assem: bled parts made from bolts, nuts and washers. Subjects received a base pay amount for assembling a minimum of 50 quality parts per session and a per piece incentive for parts over 50. If subjects assernbled 120 quality parts, the production maximum, the total amount they could earn in incentives equaled 0%, l0%, 30%, 60% or 100% of their base pay. Results indicated that the productivity of subjects in the l0%, 30%, 60% and 100% groups was significantly greater than that of subjects in the 0% incentive group; however, the productivity of subjects in the l0%, 30%, 60% and 100% incentive groups did not differ.