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Cash, non-cash, or mix? Gender matters! The impact of monetary, non-monetary, and mixed incentives on performance

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  • Hanna M. Sittenthaler

    (Technical University of Munich, TUM School of Management)

  • Alwine Mohnen

    (Technical University of Munich, TUM School of Management)

Abstract

Standard economic theory asserts that cash incentives are always better than non-cash ones, or at least not worse. This study employs a real effort experiment to analyze the impact of monetary, non-monetary, and a combination of monetary and non-monetary incentives on performance, where non-monetary incentives are defined as tangible incentives with market value. Our overall results suggest that there exists no significant difference in performance in response to monetary, non-monetary, and mixed incentives. However, gender-based differentiation reveals a different picture: the performances of men and women depend upon the type of incentive used. Whereas men’s performance is significantly higher in response to monetary incentives compared to non-monetary ones, women’s performance is significantly higher in response to non-monetary incentives. The gender differences in the effectiveness of monetary and non-monetary incentives do not seem to be triggered by the perceived attractiveness of the non-monetary incentives but rather by the differences between men and women in the feelings of appreciation and perceived performance pressure in a tournament setting. Therefore, our results indicate that gender differences must be considered when implementing incentives.

Suggested Citation

  • Hanna M. Sittenthaler & Alwine Mohnen, 2020. "Cash, non-cash, or mix? Gender matters! The impact of monetary, non-monetary, and mixed incentives on performance," Journal of Business Economics, Springer, vol. 90(8), pages 1253-1284, September.
    • Handle: RePEc:spr:jbecon:v:90:y:2020:i:8:d:10.1007_s11573-020-00992-0
    DOI: 10.1007/s11573-020-00992-0
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    More about this item

    Keywords

    Monetary incentives; Non-monetary incentives; Mixed incentives; Gender differences; Work performance; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • 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

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