Job Mission as a Substitute for Monetary Incentives: Benefits and Limits

Abstract

Many jobs are connected to a prosocial mission—namely, to a social purpose beyond profit maximization. I use three laboratory experiments to investigate if employers can use the mission to economize on monetary incentives. In my first experiment, I exogenously vary whether the agents’ effort generates a donation to a charity of their choice (matched mission), generates a donation to a charity chosen by another subject (random mission), or generates no donation (no mission). I find that the mission, whether matched or random, increases effort compared to the no-mission condition. Consistent with the theory, nonmotivated principals exploit the agents’ motivation by offering lower piece rates, whereas very motivated principals pay higher piece rates to boost the donation. I find no difference in the effort and piece rate between the matched- and random-mission conditions. In my second experiment, I use a selected pool of motivated subjects but still observe no difference between these two treatments. In my third experiment, I explore whether the effect of mission-matching may arise through gift exchange: principals decide between choosing the mission or delegating the choice to the agent. I do not find evidence that agents who are delegated the mission choice reciprocate with higher effort. These findings suggest that while a prosocial mission allows for economizing on monetary incentives, there are no further gains from increasing the quality of the mission-matching. Data and the supplemental material are available at https://doi.org/10.1287/mnsc.2017.2903 . This paper was accepted by Uri Gneezy, behavioral economics.

Where Does the Good Shepherd Go? Civic Virtue and Sorting into Public Sector Employment

“…The construct of prosocial motivationand civic virtue in particularis closely related to the construct of mission preferences (Besley and Ghatak, 2005;Carpenter and Gong, 2016;Cassar, 2016Cassar, , 2018Cassar and Meier, 2017). A mission has been defined as a non-profit goal of an organization, in particular the goal of producing public goods, and is closely related to the construct of intrinsic motivation (Besley and Ghatak, 2005;Carpenter and Gong, 2016).…”

“…Mission preferences are the preferences of individuals to work in organizations with specific missions (Carpenter and Gong, 2016). Missions can also be more broadly defined as the financial and social targets of an organization (Cassar, 2016), whereas the term 'prosocial mission' is then concretely used for the social purpose of an organization beyond profit maximization (Cassar, 2018). 3 (Many) work activities in the public sector serve the community.…”

Intentions for Doing Good Matter for Doing Well: The (Negative) Signaling Value of Prosocial Incentives

“…First, a growing literature investigates the effect of non-monetary and prosocial incentives on workers' productivity (for a review, see Cassar and Meier, 2016). The empirical papers (e.g.…”

Sorting and Wage Premiums in Immoral Work

“…List (2007, 2008) question whether social preferences matter in markets, due to factors including high stakes, market competition and experience. Our estimates from the administrative labor market data indicate a substantial wage premium for immoral work, suggesting that many workers are willing to forgo financial gains to not work in immoral 7 Our study also relates to research on effort and sorting by mission-oriented types (Besley and Ghatak, 2005;Prendergast, 2007;Delfgaauw and Dur, 2008;Ariely, Bracha and Meier, 2009;Dal Bó, Finan and Rossi, 2013;Fehrler and Kosfeld, 2014;Tonin and Vlassopoulos, 2015;Carpenter and Gong, 2016;Cassar and Meier, 2018;Cassar, 2019;Deseranno, 2019;Dur and van Lent, 2019), though this line of research typically focuses on worker motivation and effort within firms and not on worker morality and labor demand in competitive labor markets.…”