City Research Online

Abstract

Prior theory suggests that incentive plans, such as piece-rate or commission plans, motivate good performance because employees anticipate that current performance will generate matching future incentive payments. In this article, we move beyond reward expectancy to argue that performance can also derive from employees’ reactive responses to received incentive payments. We propose a salience-based theory casting incentive payments as recurring temporal markers that periodically increase the salience of the incentive plan, to which employees respond by temporarily increasing incentivized and unincentivized performance. We introduce multivariate time-series methods to test our hypotheses in longitudinal data spanning 169 weeks (1183 days), drawn from an online firm using an incentive plan for its customer-support employees. While we find no evidence that incentive payments affect the dynamics of incentivized performance, they do temporarily boost several unincentivized behaviors and outcomes. Combined with fieldwork, these findings support our proposed mechanism of ‘salience-induced reciprocity’ – i.e., the temporary reciprocity in response to a periodic increase in the salience of the incentive plan. This article contributes to a more complete understanding of performance and effort dynamics in incentive plans, offers new inroads into studying temporality in the functioning of HR practices, and provides other future research avenues.

Publication Type:	Article
Additional Information:	This article is distributed under the terms of the Creative Commons Attribution 4.0 License (https://creativecommons.org/licenses/by/4.0/) which permits any use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access pages (https://us.sagepub.com/en-us/nam/open-access-at-sage).
Publisher Keywords:	pay-for-performance; incentive plan; incentive payment; performance dynamics; salience; reciprocity; multivariate time-series analysis
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Departments:	Bayes Business School > Management
SWORD Depositor:	Symplectic Administrator

Export

Downloads