This study used a 2x2 between-subject experiment to examine the relationship between monetary incentives, task complexity and performance. Monetary incentives in this study were applied in two types, piece-rate and fixed-rate, while task complexity was varied in two categories, low and high. Participants’ performance was measured through the completion of tasks assigned. Results of this study indicates no effect of monetary incentive on performance, yet there is a significant effect of task complexity on performance where participants provided with tasks with low complexity showed a significantly higher performance than participants provided with tasks with high complexity. Furthermore, this study finds no interaction between monetary incentives and task complexity on performance. It is implied from this study that monetary incentives were not the main factors that contribute towards employees’ performance in the companies. Besides, task complexity is an important factor to be considered by firms, as it can influence their employees’ performance.
Keywords: Monetary Incentives, Task Complexity, Performance
Manuscript type: Research paper. Research aims: This study experimentally examines the relationship between relative performance information (RPI), goal setting and performance. Hypotheses are developed based on social comparison theory, goal setting theory and relevant prior studies. Design/Methodology/Approach: This study deploys multiple sessions of experiments with 110 undergraduate students as the participants. The two manipulated variables are the provision of RPI and the level of goal difficulty. Research findings: Results from the experiment indicate that the presence of RPI is positively associated with performance, and an attainable goal is associated with high goal commitment and eventually, higher performance. More importantly, this study finds an interaction between RPI and goal commitment, where the positive effect of RPI on performance is more pronounced in a condition where individual's goal commitment is high. Theoretical contributions/Originality: This study contributes to the accounting literature by providing empirical evidence that the
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