Goal Setting, Feedback and Bonus Pay in a Field Experiment

A Field Experiment is run at a large Dutch Company, specialized in stock taking activities. A total of 82 projects of the Company were used to test if different kinds of incentives would increase a workers’ productivity. The projects were split up in 3 groups. Two groups were treatment groups, and the third group served as a control group. The workers in the treatment groups got performance related goals communicated just before projects started. In one of the treatment group, the workers were also told that they would receive feedback on their performance relative to the goals, and in the other treatment group workers were eligible for a bonus pay if they reached the goals. Workers in the feedback treatment increased their productivity with at least 7.3 percent and workers in the bonus pay treatment increased their productivity with at least 10.8 percent. It is shown that these results are mainly caused by the fact that workers put in more effort in their work activities, and therefore these results are not driven by multitasking or gaming.