Effects of group feedback, goal setting, and incentives on organizational productivity.

Abstract

While industrial and organizational psychologists have been concerned about the national problem of increasing productivity, most research has focused on simple jobs with the individual as the unit of analysis. Most jobs are more complex and, because of the interdependencies in the work, require group-level interventions and more complex measures of performance or productivity. This research presents a new method of measuring productivity, the Productivity Measurement and Enhancement System (ProMES), and uses measures from this approach as a foundation for group-based feedback, goal setting, and incentives. The experimental design consisted of a baseline period of 8 to 9 months, followed by a 5-month period of feedback based on the ProMES. Goal setting was then added to feedback for 5 months. Finally, incentives in the form of time off from work were added to feedback and goal setting for another 5 months. Results indicated that group-level feedback increased productivity an average of 50% over baseline, group goal setting increased productivity 75% over baseline, and group incentives increased productivity 76% over baseline. Control group data showed no or only a slight increase in productivity over the same period, and level of personnel either stayed the same or decreased. In addition, work attitudes such as job satisfaction, turnover intentions, and morale were as good or better following the interventions. Issues pertaining to group-based interventions are discussed.

Systematic review of the links between human resource management practices and performance

“…Five of these studies showed that compensation and rewards in interaction with various other HRM practices had a positive effect. Studies by Pritchard et al 576,577 found that although feedback alone was instrumental in improving the performance of employees by 50%, when feedback was used with goal setting and incentives, productivity improved by 76%. Similarly, a study by Knight et al 578 found that combining incentives with difficult goals achieved best results.…”

Computer-Based Intelligent Tutoring Systems: A Cognitive Approach to Team Training and Performance Research

“…-Private versus public feedback (Nordstrom, Lorenzi, & Hall, 1991;Pritchard, Jones, Roth, Stuebing & Ekeberg, 1988;) -Performance versus mastery goals (Dweck, 1986;Kozlowski, 1996; In press) -Reward systems (Latham & Locke, 1991;Locke & Latham, 1990;Pritchard et al, 1988; -Degree of interdependence (Mitchell & Silver, 1990;Saavedra, Early & Van Dyne, 1993) Prislin et al (1996 examined the effects of competition on skill acquisition. Competition produced beneficial effects on skill acquisition when it was introduced late in training and inhibitory effects when it was introduced early in training.…”

Setting Performance Standards: A Review of Related Literatures and Identification of Future Research Needs

“…Further, Pritchard, Jones, Roth, Stuebing, and Ekeberg (1988) have extended the notion of negative performance utility estimates by explicitly mapping the entire range of performance effectiveness. That is, they generate "contingency curves" where the horizontal, X-axis is an increasing scale of performance on a criterion and the Y-axis is a measure (in ratio scale) of the estimated effectiveness of that performance to the organization, ranging from -100 to +100.…”

“…For example, both Eaton, Wing, and Mitchell (1985) and Sadacca et al (1990) developed metrics in terms of hypothetical individuals (e.g., perhaps 5 superior people are worth the same as 8 average, 50th percentile, individuals). On the other hand, the work of Pritchard et al (1988) finesses the metric problem by assessing utility in terms of an abstract effectiveness scale ranging from -100 to +100. It should be clear that performance utility (and, hence, how we conceive of performance standards) can be approached in many formats, such as an abstract value, a subjective rating along some criterion dimension, measured output (quantity of production, production value), or hypothetical individuals (i.e., some sort of prototypic individual, ranging from minimally qualified to outstanding).…”

“…As noted above, Pritchard et al (1988) have developed functions which map task outcomes (e.g., failure rates for a manufactured product) against judgments of organizational effectiveness (see Figure 4 for a typical pattern). These judgments are presumed to be on a ratio scale, such that a zero-point of effectiveness can be identified.…”