Effects of Hourly, Low-Incentive, and High-Incentive Pay on Simulated Work Productivity: Initial Findings With a New Laboratory Method

Abstract

The failures of previous studies to demonstrate productivity differences across different percentages of incentive pay may be partially due to insufficient simulation fidelity. The present study compared the effects of different percentages of incentive pay using a more advanced simulation method. Three payment methods were tested: hourly, low-incentive, and high-incentive (0%, 10%, and 100%) pay. Four participants performed a simulated work task for 30 6-hr sessions. Productivity under the 100% incentive condition was consistently higher than under the 10% condition for all participants. Productivity under the 10% condition was higher than under the 0% condition for two participants. Results suggest that different percentages of incentive pay may in fact produce productivity differences under more realistic simulated work conditions.

Keywords:

• productivity differences
• different percentages of incentive pay
• simulation method

Acknowledgments

This work was supported by the Korea Research Foundation Grant funded by the Korean Government (MOEHRD, Basic Research Promotion Fund) (KRF-2008-327-H00037). This work was also supported by the National Research Foundation of Korea (NRF) grant funded by the Korean government (MEST) (No. M10740030003-07N4003-00310).