The carrot vs. the stick in work team motivation

Abstract

This paper reports on the use of carrot (positive) and stick (negative) incentives as methods of increasing effort among members of work teams. We study teams of four members in a laboratory environment in which giving effort towards the team goal is simulated by eliciting voluntary contributions towards the provision of a public good. We test the efficiencyimproving properties of four distinct environments: monetary prizes given to high contributors versus monetary fines assessed to low contributors, where high/low contributor is defined first in terms of absolute contributions and then in terms of contributions relative to abilities-which we call handicapping. Our results show that both carrot and stick can increase efficiency (i.e., contributions) levels by 10-28%. We find that handicapped incentives promise the highest efficiency levels, and when handicapping is not used penalties may be more effective than prizes. The implications for work teams and suggestions for practical implementation are discussed.

When punishment fails: Research on sanctions, intentions and non-cooperation

“…Threats of sanctions can reduce expected payoffs to non-cooperative actions and leave cooperation 1 Other studies report similar all-or-nothing behavior (Dickinson, 2001;Fehr and Gächter, 2002;Tyran and Feld, 2006). However, we are not aware of any study that distinguishes the relative importance of intention and incentive effects in these all-or-nothing decisions, nor have these studies recognized the significance of punishment's relative magnitude in affecting the distribution of returns.…”

“…A large literature in psychology and economics points to both intentions and incentives as important determinants of sanctions' effects (Andreoni et al, 2003;Bewley, 1999;Camerer, 2003;Dickinson, 2001;Falk et al, 1999;Fehr and Falk, 2002;Fehr and Gächter, 2000a;Fehr and List, 2004;Fehr and Rockenbach, 2003;Schmidt, 2007 Gneezy andRustichini, 2000a,b;Ostrom et al, 1992;Sefton et al, 2002;Yamagishi, 1986Yamagishi, , 1988. In general, intentions involve personalized rules by humans while incentives involve impersonal rules by law.…”

Punish or perish? Retaliation and collaboration among humans

“…Positive incentives become costly, but negative cheap, if success is fully achieved, i.e. all cooperate [10,[69][70][71].…”

Smiley or Frowney: The Effect of Emotions and Empathy Framing in a Downstream Water Pollution Game

“…As positive and negative emotions are shown to be linked to monetary rewards and punishments (Offerman, 2002;Bosman & van Widen, 2002) and those monetary rewards and punishments affect behavior, it is reasonable to expect that we will reject the null hypothesis. Along the same lines, as punishments were shown to be more effective than rewards (Andreoni et al, 2003;Dickinson, 2001;Sefton et al, 2008;Sutter et al, 2010;van Soest & Vyrastekova, 2006), we would expect that expressing negative emotions will increase CT usage more than expressing positive emotions.…”

“…Experimental papers report that punishment is more effective than rewards in dictator games (Andreoni et al, 2003), public goods games (Dickinson, 2001;Sefton et al, 2008;Sutter et al, 2010, but not in Walker & Halloran, 2004, and common pool resource games (van Soest & Vyrastekova, 2006). Furthermore, Andreoni et al (2003) show that both methods are complements rather than substitutes in enforcing the ideals/norms and reaching the specific objectives.…”