American Economic Review · 2017 · 198 citations · 45 references
ManagementBusiness EconomicsOrganizational BehaviorExperimental EconomicsIncentive SystemsTeamworkBehavioral IncentivesIncentive CompensationIndividual IncentivesMonetary IncentivesTeam IncentivesTeam-based IncentivesIndividual Sales IncentivesLong-term StabilityPeer Pressure In TeamsPerformance Incentive SystemsResistance To Peer PressureRetail Team IncentivesTeam BonusesTeam-based Sales Incentives
In a field experiment with a retail chain (1,300 employees, 193 shops), randomly selected sales teams received a bonus. The bonus increases both sales and number of customers dealt with by 3 percent. Each dollar spent on the bonus generates $3.80 in sales, and $2.10 in profit. Wages increase by 2.2 percent while inequality rises only moderately. The analysis suggests effort complementarities to be important, and the effectiveness of peer pressure in overcoming free-riding to be limited. After rolling out the bonus scheme, the performance of the treatment and control shops converges, suggesting long-term stability of the treatment effect. (JEL D22, J31, J33, L25, L81, M53, M54)
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American Economic Review · 2012 · 6.8K citations
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Canice Prendergast · Journal of Economic Literature · 1999 · 3.4K citations
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