Association for Behavior Analysis International

Monetary incentives and goals, alone and in combination, have been shown to improve performance in a variety of settings. Well-controlled research on incentives is difficult to do in applied settings because the systematic manipulation of pay systems affects employee income. Additionally, it is often not feasible or appropriate to implement different pay systems or stagger their implementation for employees within the same organization. The first presentation will describe a laboratory study that examined the relative effects of tiered goals and monetary incentives. Unless goals are set too high, monetary incentives enhance the effectiveness of goals. However, it is difficult to set goals that are appropriate for all employees: Goals may be too high for some, just right for some, and too low for others. Tiered goals, setting multiple goals or sub-goals for performance, may offer a solution to this problem and promote the enhancing effects of the incentives. While laboratory research can inform organizational decisions about incentive systems, it cannot address issues that arise when implementing them. The second presentation will describe case studies that examined the effects of various monetary incentive systems in an applied setting, along with the trials and tribulations (and successes) that accompanied their implementation.

Goals are often touted as a relatively inexpensive and easy way to increase performance. For organizations, goals and incentives often go hand-in-hand and thus it is difficult to know the true impact of the goals on employee performance. This talk will begin by summarizing the different types of goal-setting strategies before delving into the concept of tiered goals and the reasoning behind their potential efficacy. It will then discuss the methodology of a laboratory study that focused on the effects of tiered goals and piece-rate pay, both alone and in combination. The results will then be discussed, the findings from which could change the way that organizations use goals and piece-rate pay as a means to improve the performance of their employees. At a minimum, tiered goals could add another tool to the performance improvement toolkit within an organization - one that is an advancement over the common goal-setting methods.

Monetary incentive systems are an extremely popular area for research and discussion in both the business and academic world. For good reason, these systems receive an intense amount of interest including the attention of Nobel Prize winning researchers. Salary and wage expenses typically account for 25% - 50% (or more) of a business's expenses. Understanding how best to deploy such resources in a business represent tremendous opportunity for cost savings and performance improvement. The present case study will examine the application of various monetary incentive systems in an applied setting, including commission pay, wage pay, and sales contests. Comparisons will be drawn between experimental studies and the results of these applied studies. Audience members will gain a deeper understanding of monetary incentives through real-world examples, including successes and failures. Applying laboratory research to the real world can be a messy affair, and sharing these attempts with others helps the field advance.