Do Financial Incentives Help or Harm Performance in Interesting Tasks?

Ji Hyun Kim, Barry Gerhart, Meiyu Fang

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

There continues to be disagreement about whether financial incentives help or harm performance, especially in interesting tasks. Although the Jenkins, Mitra, Gupta, and Shaw (1998) meta-analysis finds a positive effect of incentives, including in interesting tasks (reported ρ = +.34; our computed δ = +.79), a more recent and widely cited meta-analysis by Weibel et al. (2010) reports, in contrast, a negative effect (δ = −.13) of incentives on performance in interesting tasks. Thus, the effect size for interesting tasks differs by.92 standard deviation (SD) between the two meta-analyses, a very large difference. We incorporate primary studies from these two meta-analyses and other sources in a new, more complete meta-analysis of incentives–performance in interesting and noninteresting tasks. We also examine additional key moderators (incentive intensity, how motivation-driven performance is, and autonomy). We find that the incentives–performance relationship is positive in both interesting (δ = +.58) and noninteresting tasks (δ = +.52). In addition, we find that the positive incentives–performance relationship is robust to not only task interest, but also to incentive intensity, how motivation-driven performance is, and autonomy. However, the incentives–performance relationship is less positive for performance measured as quality, especially in interesting tasks. We provide suggestions for future research

Original languageEnglish
Pages (from-to)153-167
Number of pages15
JournalJournal of Applied Psychology
Volume107
Issue number1
DOIs
StatePublished - 2022

Keywords

  • Compensation
  • Financial incentives
  • Meta-analysis
  • Motivation
  • Task performance

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