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Incentives, Motivation and Performance 1 How Monetary Incentives Can Affect Intrinsic Motivation and Performance when the Complexity of the Task Increases Britney Myers James Madison University AHRD 630

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How Monetary Incentives Can Affect Intrinsic Motivation and Performance when

the Complexity of the Task Increases

Britney Myers

James Madison University

AHRD 630

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Introduction

Incentives and reward systems have been a part of everyday life for years and

years, so much so that the average person does not stop to think of their existence. People

will have a reason to work harder and perform better if they know a reward will be given

at the end (Pink, 2009). What if this is not always the case? What if these incentives that

are used on a daily basis are actually hurting intrinsic motivation and overall

performance? More and more studies are being conducted to investigate this

phenomenon, and increasingly these studies are showing that incentives are not always

the answer to increased motivation and performance (Bonner, Hastie, Sprinkle, & Young,

2000).

The purpose of this study is to show that monetary incentives are not always

successful motivators in increasing performance. It has been shown that incentives do

have positive results when certain tasks are involved; however, current research suggests

that the complexity of the task determines whether or not the incentive will work (Bonner

et al., 2000). Intrinsic motivation can be challenged when incentives are thrown into the

mix. Studies are now showing that reduced intrinsic motivation can ultimately hurt the

outcome of an employee’s work (Benabou & Tirole, 2003). Moreover, offering too much

of an incentive can have a de-motivating effect on performance. Does the level and

amount of incentive affect performance, effort and motivation?

This topic is worth investigating because monetary incentives are not just used

sporadically, but rather on a daily basis for many corporations, schools and even in

households around the United States. Economists, and some others, often used to think

that the way to increase a worker’s motivation to perform better and/or faster is to offer

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some type of incentive to do so. To this point Camerer and Hogarth (1999) stated,

Economists presume that experimental subjects do not work for free and

work harder, more persistently, and more effectively, if they earn more

money for better performance. Psychologists believe that intrinsic

motivation is usually high enough to produce steady effort even in the

absence of financial rewards; and while more money might induce more

effort, the effort does not always improve performance, especially if good

performance requires subjects to induce spontaneously a principle of

rational choice or judgment. (p. 7)

Economists traditionally have studied extrinsic incentives and psychologists have

concerned themselves with intrinsic motivation, but more recently the two disciplines are

combining their collective research to try and figure out the exact nature of monetary

incentives and how they work (Camerer & Hogarth, 1999).

Although it is agreed that incentives do work for many tasks, it is important to also

realize that incentives may not always be productive the way they are supposed to be

(Steers, Mowday, & Shapiro, 2004). In many cases incentives can produce provide

counterproductive results. For example, the main goal of many companies is to make a

profit. In order to make a profit, organizations must maximize employee performance by

creating workplace environments that motivate employees (Nohria, Groysberg, & Lee,

2008). If incentives do not always work for all types of tasks the way they are supposed

to, then it’s important to try and figure out when they most often do and don’t work. By

doing this, companies can come up with alternative measures to better reach employees

and people in general for the instances where monetary incentives may not be productive.

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This is especially relative today since profit margins are down right now.

Research questions

For the purposes of this study, there are a couple of research questions that will be

investigated. First, are monetary incentives a successful motivator to complete tasks

beyond a certain level of complexity? This question helps cover the basis of incentives

and whether or not they should be used as a main mean of motivating a person. Second,

how do monetary incentives affect intrinsic motivation? This question will further look

into the importance of intrinsic motivation and how monetary incentives may undermine

it (Benabou & Tirole, 2003; Camerer & Hogarth, 1999; Frey & Jegen, 2001). Finally, do

monetary incentives always increase performance? Some studies suggest that incentives

can increase effort but don’t always result in increased performance (Bonner et al., 2000;

Rydval, 2003) and therefore this is also important to study whether and how often

incentives actually increase performance.

Hypothesis

There is one proposed hypothesis that has been made from the information gathered

from the referenced articles. Specifically looking at the research of Bonner et al. (1999)

which focuses on the level of complexity of a task, this study will closely look at how the

type of task given can affect whether or not an incentive will help performance or not.

Also, in Benabou and Tirole’s (2003) article, which ties intrinsic and extrinsic motivation

into incentives, they look at how all three inadvertently affect each other will also be a

key point in this study. Therefore, it’s hypothesized that: Higher levels of monetary

award for completing complex, cognitive tasks will be associated with, (a) lower

performance, and (b) a decrease in intrinsic motivation.

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Key Definitions:

Monetary incentives: Monetary incentives include those rewards that are offered in

conjunction with the assignment of a duty, in order to help motivate a person to put forth

their best work towards that duty. Incentives are seen as a reason for people to be

motivated; a way to control actions of people (Awasthi & Pratt, 1990). Many people have

the thought that without an incentive, a person will have no reason to want to work hard

and therefore will not perform to the best of their abilities. When incentives are the only

part taken into consideration when it comes to motivation, it ignores the fact that there is

another type of motivation that exists within a person, intrinsic motivation. This specific

variable, a monetary incentive, will be studied in order to try and further understand how

and why it affects the three other variables.

Complex task: Tasks are more complex when the level of skill that is required

increases, requiring more processing and attention (Bonner & Sprinkle, 2002). It’s hard

to define what exactly a “complex task” is, however there are certain requisites that help

constitute a task as more complex than another task. Some of these requisites include (but

are not limited to): (1) more cognitive thinking, (2) more processing, (3) memory

enhancement, (4) greater problem-solving efforts and (5) use of judgment (Bonner,

Hastie, et al., 2000). Meanwhile, tasks that include mechanical skill, repetitive, and/or

mindless steps are seen as less complex. It has been suggested by a number of studies that

the more complex a task is, the less likely an incentive will work (Bonner & Sprinkle,

2002; Bonner et al., 2000; Rydval, 2003). The type of task used will be taken into

consideration during each experiment.

Intrinsic Motivation: Motivation is seen as a reason to accomplish a task. There are

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two types of motivation, intrinsic and extrinsic (Deci, 1975). For the purposes of this

study, intrinsic motivation will be addressed and the extrinsic motivator will be played as

monetary incentives.

Intrinsic motivation is different from extrinsic motivation in that the motivation to

do something comes within a person rather than from an external source. A person is

often intrinsically motivated when they already have some interest in the subject of the

job before it was assigned to them or when they have a desire to increase their knowledge

or skill set that will be required of them throughout that specific job (Camerer & Hogarth,

1999). People are also often intrinsically motivated to impress their peers and/or

superiors.

Performance: Motowildo (2003) defines job performance as the “total expected

value to the organization” that makes a difference to “organizational goal

accomplishment,” whether positively or negatively, based on an employee’s behavior.

For example, good performance is defined as a behavior that leads to a positive effect on

the organization. When a person is given a job, they are expected to finish that job to a

certain degree/level that is asked of them. For example, a person is said to have

performed well if they met the expectations that were presented and/or went beyond

those expectations. Incentives are assumed to help reach a higher level of performance,

but whether this is actually true for every case or not is what will be studied. Are there

certain types of tasks in which incentives won’t necessarily increase performance but

actually hinder it?

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Literature Review

There are five theories that can directly relate to the purpose of this study. The first

three theories help describe the thinking and reasoning behind why incentives may help

motivation. These include the expectancy theory (Vroom, 1964), social-efficacy theory

(Bandura, 1975, 1977), and goal-setting theory (Bonner & Sprinkle, 2002). The last two

theories, motivational crowding (Frey & Jegen, 2001) and two-factor theory (Herzberg,

1974), help describe how incentives may not always work the way they are expected.

Expectancy theory (Vroom, 1964) also supports the study’s framework on the use

of rewards. Vroom argues that people will participate in tasks and behaviors that they

think will bring them personal gain. If a person is expected to put forth a certain amount

of effort with a certain level of performance in order to receive a certain level of reward

(that a person desires) then he or she has a reason to participate in that task. A person will

not put forth as much effort the in future tasks if they are disappointed in the reward

given to them after completion of the first task. It’s also necessary to point out that if you

offer a reward to a new employee, or your son or daughter, the very first time you ask

them to do a certain task, it’s more likely than not that they are going to expect that

reward every other time they do it (Benabou & Tirole, 2003). Again, this theory supports

the reliance and expectance of incentives.

The next theory differs a little bit from the former theory. Social learning theory,

also known as the social-cognitive theory, was developed by Albert Bandura (1977).

Bandura (1977) stated that when a person thinks and/or knows they can successfully

accomplish a task, they are more likely to put more effort and time into that task. Instead

of dealing with desired outcomes, this theory touches more on a person’s belief of what

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they are capable of doing with the skill set they have (Bonner & Sprinkle, 2002).

Incentives are expected to especially be successful for those tasks for which a person has

a positive self-efficacy. Meanwhile, if you ask a person to perform a task they are not

equipped to do, and then add more weight (the reward) on them to get the task done, it

will just add more stress on the person and have a bigger chance for failure (Camerer &

Hogarth, 1999).

The goal-setting theory also revolves around motivation. It states that goals directly

affect how much effort a person puts into a job (Bonner & Sprinkle, 2002). It also

suggests that more specific, personal goals will lead to higher performance than vague or

the absent goals (Bonner & Sprinkle, 2002). There are three conceivable ways that the

goal-setting theory can relate to the effectiveness of incentives. Locke, Shaw, Saari, and

Latham (1981) proposed that people will more likely create a specific goal for a task

where an incentive is offered and that people will make that goal even more specific,

therefore put in more effort, for tasks that include incentives. They also proposed that

people are more likely to stay committed to the goal they created and therefore follow

through with the task given with increased effort on their part.

The motivation crowding theory states that rather than incentives increasing

performance and supply, they ultimately decrease supply because the incentive “crowds

out” intrinsic motivation (Frey & Jegen, 2001). In other words, if an incentive is put into

the equation of a task, then there tends to be no more room for intrinsic motivation

because the person is focused on getting to the prize at the end. This theory is key to this

study because it helps describe how incentives can have a negative rather than positive

effect on a person’s performance. It also points out how important intrinsic motivation is

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in carrying out duties.

Fredrick Herzberg’s (1974) two-factor theory states that employee satisfaction

and dissatisfaction are tied to two different groups of objects. First, satisfaction of a job

deals more with motivators that are closer to the actual job and the duties it entails.

Second, the “hygiene” factors are seen as the factors that can dissatisfy an employee.

Hygiene factors can include company policies, job security, supervision and working

conditions (Herzberg, 1974). One problem that arises is when a company expects

employees to work harder and be more motivated because a specific hygiene factor is

fixed. In other words, companies expect employees to be more motivated because a

problem was solved that was causing employee dissatisfaction. Companies need to

realize that motivation is a separate piece- personal growth and the challenges a task

offers a person is what motivates an employee and keeps them interested in their job, and

maintains the employee’s overall happiness.

According to Herzberg’s theory, incentives may not be the answer to get a person

motivated. His theory suggests that the type of tasks themselves and how much they

challenge a person deems more important to a person and therefore hold to be better

motivators. Herzberg (1974) also suggests that how well a person is praised and if the

task rewards that employee personal growth or not are deemed better motivators as well.

The two-factor theory does not suggest that incentives should never be used to help

motivate a person, but that incentives should not be the only tool used to motivate

(Herzberg, 1974).

Seminal Works

Bonner et al. (2000) analyzed 131 studies dealing with incentives and performance.

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Their variables included the requisite skill level of the person, the complexity of the task

and the type of incentive. They concluded from their studies that incentives are shown to

work when it comes to tasks dealing with little or no required skill, such as correcting a

paper. When the task requires more skill, such as problem solving or memory, the

success of incentives dramatically decrease or cause no effect on performance at all. The

authors pointed out that incentives do indeed work for many kinds of tasks, but that the

more complex skill a task requires, the less likely the incentive will work properly. This

study looks at similar variables from the study done by Bonner et al. in 2000, but gives

less attention to a person’s skill level.

Bonner and Sprinkle (2002) research other studies that deal with motivation,

incentives and performance. They carefully point out that although many readings state

that incentives can increase motivation and therefore performance increases, many of

these studies do not bother to talk about how they increase motivation and/or

performance on separate levels and whether one causes the other. In order to figure out

why incentives may or may not work, it needs to be known how they work in the first

place.

Benabou and Tirole (2003) directly talk about intrinsic motivation versus extrinsic

motivation, and how incentives affect both. Not only will people expect an incentive

every time thereafter they are given a similar task, but each time they perform that job, or

one similar to it, their intrinsic motivation decreases. It will especially decrease if a

reward is not offered in the future. This is due to the fact that more often than not, when

an incentive is introduced as part of a responsibility given, the attention of that person

shifts towards the end reward, rather than the task at hand (Benabou & Tirole, 2003).

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Research shows that intrinsic motivation is important and that you do not want to

get rid of it (Benabou & Tirole, 2003; Bonner & Sprinkle, 2002). People start to feel

devalued and begin to solely work to achieve the award rather than try and work hard for

themselves. It is also suggested that feedback should be valued more than incentives

because it provides people with tangible ideas of how to improve their work and where

they are already doing well (Johnson & Dickinson, 2010).

According to Nohria et al. (2008), fulfilling all four basic needs of human beings

is the best motivator for employees. The four basic drives of humans include the drive to

acquire, the drive to bond, the drive to comprehend and the drive to defend. Their

research showed that satisfying all four of these drives at the same time, and not just one

here and there, provides the greatest motivation. The first two ways to addressing all four

drives are to provide a structured reward system and to create a collaborative and open

atmosphere in which employees feel comfortable with their coworkers. The second two

ways are to provide jobs in which an employee feels as though their work is contributing

to the company and is not meaningless and to show that the organization treats all

employees fairly and is trustworthy place for open communication. The two studies the

authors did showed that covering all four drives is the key to successful motivation.

Clearly reward systems, which can give incentives, are a part of motivation, but it’s

important to remember it is not everything. Incentives should not be the only tool used to

motivate people.

Camerer and Hogarth (1999) researched 74 studies in which experiments were

done to see how incentives affected performance. There was no set conclusion that

Camerer and Hogarth were able to reach except that intrinsic motivation and a person’s

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capability to do the task seem to affect how well incentives work or not. Leuven,

Oosterbeek, and Klaauw (2010) found similar results in their study. Their study consisted

of breaking 294 first-year student participants into three groups where one group received

a large reward if they passed all the requirements of their first-year program, another

group received a smaller reward, and a third group would not receive an award at all.

Their findings were also small and insignificant in the numbers in all but one area.

Leuven et al. (2010) found that “high-performance” students performed better in their

grades and finishing the task if offered a larger reward. Meanwhile “low-performance”

students did worse when the higher the reward was offered.

Studies that are tangentially related

Awasthi and Pratt (1990) studied the effects of incentives on time spent on task as

well as effect of incentives on performance. The results concluded that for all participants

from the experimental group that received an extra incentive, they spent significantly

more time on each task compared to those participants who received the $1 that was

offered to every participant. Their experiment also concluded that there was no increase

for those participants who spent more time on each task. This study, among others, points

out that even though effort can be increased through incentives it does not mean

performance will increase; they are not always directly related.

Out of the seven job satisfaction-job performance relationship models (Judge,

Thoresen, Bono, & Patton, 2001), number five and seven are the ones found most

commonly in studies. Specifically model number five (shown below) can be related back

to incentives and intrinsic motivation. Model five shows that the relationship between job

performance and job satisfaction is “moderated by other variables” (Judge et al., 2001, p.

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379). To go along with the pay-for-performance hypothesis, many assume that the third

variable in model number five that will cause an increase in both job satisfaction and

performance are incentives (Judge et al., 2001; cite other sources). As Judge et al. (2001)

researched, Jurgensen (1978) also found in his study that employees value intrinsic

motivation over pay. This model five will be used in the experiment as a base to see

whether or not monetary incentives are in fact a variable in job performance and if they

are, to what extent they have an effect. This model will also be used to help decide

whether or not job complexity is a factor in job performance and satisfaction.

Research gap this study is to fill

This study will closely at how monetary incentives affect intrinsic motivation as

well as performance. One of the determining factors that has been said to affect whether

or not incentives work is the complexity of the task, and this will be looked at as well.

Looking at motivation, performance, and adding different types of tasks into the mix will

further help along with the research about the phenomenon of incentives. It’s needed to

know how incentives work. Also, this study will look into whether or not incentives

should be used as often as they are or if other approaches, perhaps to increase intrinsic

motivation such as positive feedback, are more appropriate and successful in the long

run.

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This study will help contribute more information/findings about employee

motivation and incentives to increase performance. Monetary incentives are continuing to

be used today and it’s relative to figure out when and if they are appropriate for each and

every task. It’s important to know how to and what will help motivate people, especially

employees.

In this time of economic downturn, it would be good to know whether or not

monetary incentives are being wasted or are truly beneficial for a company’s overall

success and how each employee is contributing to that success. If continuing studies do in

fact find that there are other factors that are more important and beneficial towards

employee motivation, then it would save money as well as help increase employees’

well-being. Overall with the four variables in play, this study is geared to find more and

newer research about what really works best to help motivate people.

Research Design

Description

This study will be conducted on-campus at James Madison University. It will use a

primarily quantitative research design. A survey will be administered to all qualifying

students via email. This survey will include some open-ended questions to gather more

qualitative-like data. A true experimental study will also be developed to test an

experimental group who receives incentives and a control group who does not.

As stated earlier, there are three research questions for this study. These questions

include, (1) are monetary incentives a successful motivator to complete tasks beyond a

certain level of complexity?, (2) how do monetary incentives affect intrinsic motivation?,

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and (3) do monetary incentives always increase performance? The survey will ask

questions to help understand personal feelings about motivation and how incentives

affect a student’s motivation. The experiment will target all three research questions but

will look more closely at how incentives affect performance.

Description of the sample

A nonrandom sampling technique, purposive sampling, will be used to gather

participants for this study. Any students who are in graduate school at James Madison

University, or have 60 or more credits can participate in the survey and/or experiment.

The reason that neither the survey nor the experiment will be open to all JMU students is

because this study is trying to look at the effects of incentives not just for students but for

people in the workplace as well. Students who are at junior standing or higher, especially

graduate students, are often more mature and are also more likely to have held a job so

they are a better target sample to be able to make possible inferences towards motivation

in the workplace.

Description of the data collection instruments

The two instruments that will be used for this study are a survey and an experiment.

The survey will be between 10 and 20 questions and will include mainly closed-ended

questions with a couple of open-ended questions. There is not a set time length on the

duration of the data collection from the survey. Data will continue to be collected until

there is a sufficient amount, at least 50 complete responses. A Likert-scale will be used

for the closed-ended questions. The survey will be administered through Qualtrics and

will be emailed to all students who fall in the sample description. The open-ended

questions will be coded using content analysis software. A sample of the survey is

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located in Appendix B.

An initial email with the information about the experiment and its purpose will be

sent out via email to all qualifying JMU students. All students who are interested in

participating will be encouraged to email researcher confirming their participation. The

students will be informed that they will receive a monetary incentive of one dollar, but

they will not be told that additional incentives may be offered for the purposes of the

experiment. If the researcher does not get enough responses back before the date of the

experiment, the length of time for participants to sign-up will be extended.

The experiment itself will look similar to the one done by Awasthi and Pratt (1990)

as well as the study done by Leuven et al. (2010). It will differ from Awasthi and Pratt’s

(1990) experiment in that it will not be closed to only those students who are in a specific

program at the university. Rather it will be open to any qualifying students who are

willing to participate. The instruments that will be administered during the experiment

will come from measures that have been used in previous studies, such as Awasthi and

Pratt (1990) and Leuven et al. (2010). Although students who are to participate in this

experiment cannot be completely chosen at random, the way they will be grouped for the

actual experiment will be random. The participants will be randomly assigned to groups

before the experiment begins.

A randomized pretest-posttest control group design will be used. All participants

will receive the exact same pre and posttests. All participants will receive a monetary

incentive of one dollar at the beginning of the study, like in Awasthi and Pratt’s (1990)

study. The participants will then be split into three groups at random. One group will

receive no extra incentive, another group will have an opportunity to receive an extra

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incentive for finishing the task and the third group will be offered an even bigger

incentive for completing the required task(s) (Leuven et al., 2010). None of the

participants will be told about the existence of other groups, only that they will receive a

small incentive, large incentive or no incentive for successfully completing the task. This

will be done so that results will not only show the difference between incentive and non-

incentive data but the varying degrees of incentives that can be offered.

The experiment will be administered at one time period. The total duration of the

experiment should last no longer than two hours. This includes time to take the pre and

post-tests as well as the actual main experimental test/task (rough estimate for now).

Description of the data analysis

A frequency distribution, as well as percentile ranks, will be used to help analyze

the data. A percentile rank will be used to calculate what percentage of each group of the

experiment falls below and above what is considered a “good” score on the experimental

test. The difference between the control and two experimental groups scores on the

test/task chosen will need be analyzed and compared. The percentage of correct and

incorrect answers between the three groups will need to be compared as well as the time

taken on the test. For the post-test, feedback will need to be compared across all three

groups. Also, the difference of answers between the pre and post-tests across all

participants needs to be analyzed as well as the difference of answers between the

experimental and control group. Meanwhile, the survey results will be tabulated and

coded before being analyzed.

A frequency polygon will also be used to interpret the results of the experiment. A

pie chart will also be made to show the comparison of scores between the control and the

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group that received additional incentives throughout the experiment.

For the survey, both quantitative and qualitative data analysis tools will be used.

For the qualitative questions, a specific content analysis software will be used to help

code and compare answers across each individual participant. This will help find trends

and patterns among answers about motivation. Qualtrics survey software will be used to

help analyze the quantitative data from the Likert-scale questions as well as the

demographical questions.

Threats and Limitations

There are some threats to validity to both data collection instruments. Subject

characteristics might be a concern since neither the survey nor the experiment is designed

to reach a certain group beyond being a JMU upper classman. Since the tests for the

experiment are being used from existing instruments, there is less of a threat to

instrumentation validity since they have been used in other credible studies.

The researcher will be designing the survey so validity for this instrument is more

of a threat. Faculty members in the department who are familiar with the study being

done will look over the tests and survey to help decrease the threat to validity. The same

survey will be distributed to all qualifying students to help ensure reliability.

To help enhance reliability of the experiment, all three tests that will be given will

Percentage  of  test  scores  over  85%  

Non-­‐incentive  group  

Incentive  Group  

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be the same for all participants, no matter if they are in the control or experimental group.

Since this study is aimed at gathering a more “mature” sample, the hopes are to be able to

make generalizations towards how incentives affect people outside of college as well,

such as the workplace. Although both the experiment and survey will only be offered to

JMU students, who reside in Harrisonburg, VA, to complete, many students that attend

JMU permanently live in other areas outside of Harrisonburg. This will help

generalizability since the target audience will have worked in areas along the East coast

and possibly across the country.

The limitations for the experiment include how many people actually complete the

survey as well as how many people are gathered to participate in the experiment. The

minimum of completed surveys that is expected is 50. If minimum requirements are not

met, then the survey may be opened to lower classmen as well to ensure a sufficient

amount of data is collected. The survey may also be redistributed at another time to

gather more survey participants.

A possible limitation for the experiment may include little or no volunteers. If not

enough students respond back to the research with a confirmation of their participation in

the research, then the date of the experiment will be extended to a later date to allow

more time to gather more participants. If the researcher still has not gathered enough

participants at that time then the plan is to have teachers offer an extra incentive (e.g.:

extra credit) for students who volunteer to participate. This, however, would lead to a

nonrandom sample of participants. This may also affect the outcome of the data, and pose

as an extraneous variable, if the students who volunteered are offered an additional

incentive, however it would help provide a sufficient amount of participants to help

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gather enough data to analyze.

Justification of the statistical techniques and methods of analysis

The survey will reach more students and collect data on people’s feelings about

incentives. It will ask a variety of questions about how they feel about incentives, and

more specifically how they feel about incentives for certain tasks. The experiment will

actually test to see how incentives can affect a person’s performance. It will not only test

the effects of an incentive being present or not, but the degrees to level of incentive

offered (small vs. large). The pre and post-test will also go over motivational information

as well. Having two instruments for data collection will ensure that all of the variables are

covered and at different levels.

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References

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Bénabou, R., & Tirole, J. (2003). Intrinsic and extrinsic motivation. Review of

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Bonner, S., Hastie, R., Sprinkle, G. B., & Young, S. M. (1996). A review of the effects of

financial incentives on performance in laboratory tasks: Implications for

management accounting. Journal of Management Accounting Research, 19-64.

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Bonner, S. E., & Sprinkle, G.B. (2002). The effects of monetary incentives on effort and

task performance: Theories, evidence, and a framework for research. Accounting,

Organizations, and Society, 27, 303-345. Retrieved from EBSCOhost.

Camerer, F. C. & Hogarth, R. M. (1999). The effects of financial incentives in

experiments: A review and capital-labor-production framework. Journal of Risk

and Uncertainty, 19, 1-3; 7-42.

Colin F., C., & Robin M. H. (1999). The effects of financial incentives in experiments:

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Deci, E. (1975). Intrinsic motivation. New York: Plenum.

Frey, B. S., & Jegen, R. (2001). Motivation crowding theory. Journal of

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Geiger, M. A. & Cooper, E. A. (1996). Using expectancy theory to assess student

motivation. Issues In Accounting Education, 11(1), 113.

Glucksberg, S. & Weisberg, R. W. (1966). Verbal behavior and problem solving: Some effects of

labeling in a functional fixedness problem. Journal of Experimental Psychology, 71(5),

659-664. doi: 10.1037/h0023118.

Herzberg, F. (1974). Motivation-hygiene profiles: Pinpointing what ails the organization.

Organizational Dynamics, 3(2), 18-29.

Jurgensen, C. (1978). Job preferences (What makes a job good or bad?). Journal of

Applied Psychology, 65(3), 267-276. Retrieved from APA PsycNET.

Johnson, D. A., & Dickinson, A. M. (2010). Employee-of-the-Month programs: Do they

really work?. Journal of Organizational Behavior Management, 30(4), 308-324.

doi:10.1080/01608061.2010.520144.

Judge, T., Thoresen, C., Bono, J., & Patton, G. (2001). The job satisfaction-job

performance relationship: A qualitative and quantitative review. Psychological

Bulletin, 127(3), 376-407. doi: 10.1037//0033-2909.127.3.376.

Kohn, A. (1993). Why incentive plans cannot work. Harvard Business Review, 71(5),

54-63.

Leuven, E., Oosterbeek, H., & Klaauw, B. (2010). The effect of financial rewards on

students’ achievement evidence from a randomized experiment. Journal of the

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Motowidlo, S. (2003). Job Performance. Handbook of Psychology, 39-53. doi:

10.1002/0471264385.wei1203.

Nohria, N., Groysberg, B., & Lee, L. (2008). Employee motivation: A powerful new

model. Harvard Business Review.

Pink, D. (2009). Drive: The surprising truth about what motivates us. New York:

Penguin Group.

Rydval, O. (2003). The impact of financial incentives on task performance: The role of

cognitive abilities & intrinsic motivation labour. Center for Economic Research

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Vroom, V. (1964). Work and motivation. New York: Wiley.

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Appendix A: Survey Cover Letter

Dear JMU Student,

This survey is being conducted by Britney Myers of the Adult Human Resource Master’s Program at James Madison University. The target audience for the study is all JMU students’ upper level undergraduate students with Junior standing, 60+ credit hours, and all graduate students. The purpose of this study is to investigate how motivation and performance are affected by monetary incentives. Recent studies have shown that for more complex tasks that require cognitive skill, monetary incentives do not work the way they are supposed to. This study is being done to help further investigate the effectiveness of monetary incentives and under what settings they should or should not be used. The questions in the survey are designed to determine how people feel about monetary incentives and how they feel these incentives affect their work and performance. It will require no more than ten minutes of your time. There is no compensation for completing this survey, although it is greatly appreciated if you do choose to complete the survey. There is also no known risk to completing this survey. There is no forced completion so if you choose to take the survey, you may stop and end it at any given time. All answers that are submitted are anonymous. The data will be analyzed using quantitative methods with statistical software. If you have any questions or concerns, please contact me at [email protected].

Thank you for your time.

Britney Myers

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Appendix B: Survey

Part A

1.  Please  choose  your  age  range  

(18-­‐20;  21-­‐23;  24-­‐26;  27+)  

2.  College  level  

(a.  Freshman  b.  Sophomore  c.  Junior  d.  Senior  e.  Graduate  student)  

3.  Have  you  ever  held  a  full  or  part  time  job?  

(Yes;  No)  

Part  B  

1. Monetary incentives provide extra motivation for me.

(Strongly Agree…Agree…Neutral…Disagree…Strongly Disagree)

2. Monetary incentives stress me out.

(Strongly Agree…Agree…Neutral…Disagree…Strongly Disagree)

3. Monetary incentives motivate me to work harder.

(Strongly Agree…Agree…Neutral…Disagree…Strongly Disagree)

4. Monetary incentives help me perform better on tasks.

(Strongly Agree…Agree…Neutral…Disagree…Strongly Disagree)

5. My intrinsic motivation is enough for me to want to do well.

(Strongly Agree…Agree…Neutral…Disagree…Strongly Disagree)

6. The harder the task is, the less incentives work for me.

(Strongly Agree…Agree…Neutral…Disagree…Strongly Disagree)

7. I perform better when monetary incentives are given.

(Strongly Agree…Agree…Neutral…Disagree…Strongly Disagree)

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8. The harder the task is, the more incentives work for me.

(Strongly Agree…Agree…Neutral…Disagree…Strongly Disagree)

9. I perform worse when monetary incentives are given.

(Strongly Agree…Agree…Neutral…Disagree…Strongly Disagree)

10. Monetary incentives rarely ever motivate me.

(Strongly Agree…Agree…Neutral…Disagree…Strongly Disagree)

11. What is the best motivator for you to perform well?

(Open-ended question)

12. How important is intrinsic motivation to you?

(Open-ended question)