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Mission and the Bottom Line: Performance Incentives in a Multigoal Organization

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  • Xavier Gine
  • Ghazala Mansuri
  • Slesh A. Shrestha

Abstract

We assess the role of monetary incentives in a mission-oriented organization by randomly assigning workers to one of two bonus schemes, incentivizing either the performance of a microcredit program (bottom line) or the empowerment of clients (mission). We find that the credit bonus improved credit-related outcomes but undermined the social mission, while the social bonus did not harm the bottom line. These results are consistent with a multitasking model with production spillovers or with prosocial behavior. We show that when mission-related rewards are not feasible, organizations that care about both the mission and the bottom line prefer flat wages to incentives.

Suggested Citation

  • Xavier Gine & Ghazala Mansuri & Slesh A. Shrestha, 2022. "Mission and the Bottom Line: Performance Incentives in a Multigoal Organization," The Review of Economics and Statistics, MIT Press, vol. 104(4), pages 748-763, October.
    • Handle: RePEc:tpr:restat:v:104:y:2022:i:4:p:748-763
    DOI: 10.1162/rest_a_01001
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    Cited by:

    1. Erika Deserranno & Gianmarco León-Ciliotta & Firman Witoelar, 2021. "When Transparency Fails: Financial Incentives for Local Banking Agents in Indonesia," Working Papers 1233, Barcelona School of Economics.
    2. Mansuri, Ghazala & Palaniswamy, Nethra & Rao, Vijayendra & Shrestha, Slesh A., 2023. "Money versus Kudos: The impact of incentivizing local politicians in India," Journal of Public Economics, Elsevier, vol. 224(C).

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