Relative Effectiveness and Cost-Effectiveness of Cooperative, Competitive, and Independent Monetary Incentive Systems

Abstract

This study assessed relative effectiveness and costeffectiveness of three monetary incentive systems superimposed on a feedback system in a treatment center serving handicapped children. Subjects were teacher assistants. In the "cooperative" condition each subject received a portion of the allotted money based on the average performance of all subjects. In the "competitive" condition only the three subjects with the best performance received a portion of the allotted money. In the "independent" condition each subject received a portion of the allotted money based only on their performance. The cooperative condition was the most effective and cost-effective. However, differences in performanceamong incentive conditions were quite small. Social validity assessment indicated that cooperative was the most preferred condition by participants. Performance was generally greater during all incentive conditions compared to feedback alone, but the magnitude of differences was quite small. Therefore, results question the necessity of monetary incentives over and above objective performance feedback.