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Productivity dynamics, performance feedback and group incentives in a sales organization

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  • Aakvik, Arild
  • Hansen, Frank
  • Torsvik, Gaute

Abstract

This paper investigates the effect of performance feedback on productivity in a company where workers operate in teams and receive a bonus that depends on both individual worker and team productivity. To address this issue, we employ weekly productivity and administrative data obtained from the customer service centre of an insurance company. We find evidence that performance feedback given each Monday morning about past team production and individual rank position within teams influences current individual productivity. The effect of rank position is strongest when bonuses depend on team performance. Overall, our findings suggest that team dynamics may alleviate the free-rider problem often associated with team bonuses, where it is essential that team leaders provide information about individual and team performance in previous periods.

Suggested Citation

  • Aakvik, Arild & Hansen, Frank & Torsvik, Gaute, 2017. "Productivity dynamics, performance feedback and group incentives in a sales organization," Labour Economics, Elsevier, vol. 46(C), pages 110-117.
    • Handle: RePEc:eee:labeco:v:46:y:2017:i:c:p:110-117
    DOI: 10.1016/j.labeco.2016.12.003
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    References listed on IDEAS

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    Cited by:

    1. Michael Gibbs & Friederike Mengel & Christoph Siemroth, 2023. "Work from Home and Productivity: Evidence from Personnel and Analytics Data on Information Technology Professionals," Journal of Political Economy Microeconomics, University of Chicago Press, vol. 1(1), pages 7-41.
    2. Delavallade, Clara, 2021. "Motivating teams: Private feedback and public recognition at work," Journal of Public Economics, Elsevier, vol. 197(C).
    3. Ashby, Nathan J. & Ramos, Miguel A., 2023. "Productivity within groups: An analysis of shirking in high school cross country competitions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 106(C).
    4. Delavallade,Clara Anne, 2021. "Motivating Teams : Private Feedback and Public Recognition at Work," Policy Research Working Paper Series 9621, The World Bank.

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    More about this item

    Keywords

    Productivity; Team-dynamics; Performance feedback; Team incentives; Sales organizations;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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