The Effect of Task Interdependence and Type of Incentive Contract on Group Performance

2008 ◽  
Vol 20 (s1) ◽  
pp. 1-18 ◽  
Author(s):  
Ronald N. Guymon ◽  
Ramji Balakrishnan ◽  
Richard M. Tubbs
Keyword(s):  
Production Function ◽  
Production Technology ◽  
Group Performance ◽  
Goal Commitment ◽  
Task Interdependence ◽  
Incentive Contract ◽  
Additive Production ◽  
Piece Rate ◽  
Contract Performance ◽  
Incentive Plans

ABSTRACT: We extend Fisher et al. (2003) to investigate the effectiveness of a budget-based incentive contract to settings with alternate task characteristics.We first replicate their finding: when groups perform a task with an additive production function, a budget-based contract leads to higher levels of performance than a piece-rate contract. However, we do not find higher performance when we modify the task to be interdependent, arguably a key feature of group tasks. We also show that goal commitment mediates the incentive contract-performance relation for tasks with an additive production function. Collectively, these results suggest that variations in production technology influence the relative motivational effectiveness of different incentive plans.

Budget-Based Contracts, Budget Levels, and Group Performance

2003 ◽  
Vol 15 (1) ◽  
pp. 51-74 ◽  
Author(s):  
Joseph G. Fisher ◽  
Sean A. Peffer ◽  
Geoffrey B. Sprinkle
Keyword(s):  
Level Set ◽  
Group Performance ◽  
Performance Targets ◽  
Piece Rate ◽  
Group A ◽  
Performance Capability ◽  
Budget Levels

In this paper, we experimentally investigate the effects of budget-based contracts and budget levels (performance targets) on group performance. We compare a group piece-rate contract with two different specifications of a group budget-based contract: (1) a group budget-fixed contract that provides no remuneration for performance below the budget and a fixed bonus for performance meeting or exceeding the budget, and (2) a group budget-linear contract that provides no remuneration for performance below the budget, a fixed bonus once the budget is attained, plus a piece-rate for production in excess of the budget. We also assigned each group a budget level, set at 50 percent, 75 percent, or 100 percent of the group's performance capability. The results indicate that the group budget-linear contract led to significantly higher group performance than both the group budget-fixed contract and the group piece-rate contract. Additionally, the 75 percent budget level led to significantly higher group performance than both the 50 percent budget level and the 100 percent budget level. Finally, the variability in group performance was lowest under the group budget-linear contract and the 75 percent budget level. Collectively, these results demonstrate the efficacy of both certain types of budget-based contracts and “moderately” difficult budget goals in enhancing group performance. The results also suggest that both motivation and coordination (planning) can be enhanced by budget levels of moderate difficulty and group budget-linear contracts, as the group budget-linear contract and the 75 percent budget level not only led to the highest level of performance, but also led to the lowest variability in performance.

Referent Cognitions and Budgetary Fairness: A Research Note

2001 ◽  
Vol 13 (1) ◽  
pp. 91-105 ◽  
Author(s):  
Theresa Libby
Keyword(s):  
Individual Performance ◽  
Research Note ◽  
Incentive Contract ◽  
Production Task ◽  
Process Mean ◽  
Contract Performance ◽  
Stretch Targets ◽  
Referent Cognitions ◽  
Budgeting Process

This study examines the effects of fairness in budgeting on individual performance in a nonparticipative budgeting setting. An experiment was conducted in which subjects performed a production task and were compensated under a budget-based incentive contract. Performance was lowest when an unfair budget target was assigned using an unfair budgeting process. When the budget target assigned was fair, the fairness or unfairness of the budgeting process had no effect on performance. When an unfair budget target was determined using a fair budgeting process, mean performance was not significantly different from mean performance of the subjects assigned fair budget targets. Implications of this result in assigning stretch targets are discussed.

Modelling the semi-additive production technology in DEA

Omega ◽  
2020 ◽  
pp. 102385
Author(s):  
Mojtaba Ghiyasi ◽  
Wade D. Cook
Keyword(s):  
Production Technology ◽  
Additive Production

Implications of Social Value Orientation and Budget Levels on Group Performance and Performance Variance

2009 ◽  
Vol 21 (1) ◽  
pp. 293-316 ◽  
Author(s):  
David R. Upton
Keyword(s):  
Group Performance ◽  
Value Orientation ◽  
Incentive Contracts ◽  
Personality Types ◽  
Social Value ◽  
Relative Advantage ◽  
Social Value Orientation ◽  
Piece Rate ◽  
Equal Share ◽  
And Performance

ABSTRACT: In this paper I examine the effects of social value orientation (SVO) and group incentive contracts on performance and performance variance. SVO includes three main personality types: prosocials (who value cooperation and equality in outcomes); individualists (who focus upon their own rewards); and, competitors (who seek relative advantage over others, even at their own expense). In an experiment I form groups of participants based on their SVO and assign them to one of three incentive contracts: a piece-rate contract that pays all employees an equal share of any group output, and two budget-linear contracts (with a medium and a high budget target) that pay zero compensation below the budget target, an equal share of a bonus if the budget target is met and a piece-rate for output above the budget target. Group performance is highest for groups of prosocials and lowest for groups with competitors and SVO has a greater effect under a medium rather than a high budget over latter periods of the experiment. Further, SVO appears to play a role in influencing performance variance. These results illustrate the potential of considering individual difference measures such as SVO in conjunction with formal control systems such as budgets to enhance motivation and coordination within organizations.

scholarly journals Intermetropolitan Comparisons Of Production Function

2011 ◽  
Vol 3 (2) ◽  
pp. 112
Author(s):  
Martin Williams ◽  
Tuan Ton-That
Keyword(s):  
Production Function ◽  
Production Technology ◽  
Returns To Scale ◽  
Elasticity Of Substitution ◽  
Constant Elasticity ◽  
Constant Elasticity Of Substitution ◽  
Different Levels ◽  
Variable Returns To Scale ◽  
Inputs And Outputs

A nonhomogeneous production is used to study the features of the production technology across U.S. cities. We compute marginal productivities and scale elasticities for different levels of inputs and outputs. The form of the production function allows variable returns to scale. We can also test the Cobb-Douglas and constant elasticity of substitution forms within the nonhomogeneous specification. Conclusions are drawn concerning returns to scale across cities of different sizes.

scholarly journals The possibilities of intelligent manufacturing methods

2020 ◽  
Vol 10 (1) ◽  
pp. 13-19
Author(s):  
Péter Ficzere ◽  
Norbert László Lukács
Keyword(s):  
Quality Control ◽  
Big Data ◽  
Production Technology ◽  
Intelligent Manufacturing ◽  
Production Data ◽  
Continuous Development ◽  
Additive Production ◽  
Human Therapy ◽  
Production Technologies ◽  
Manufacturing Methods

Additive production technologies made the realization of individually designed, highly complicated geometric structures in practically all fields of industry and human therapy (implantation) possible. In order to minimalize the risk of failure originating from production technology the continuous development of measurements technologies provides the possibility to track the parameters of production and if necessary to ensure their modification. The great number of recorded production data (big data) at the same time can be used in the quality control of the product.

Conceptual Framework

2018 ◽  
Author(s):  
John H. Pencavel
Keyword(s):  
Conceptual Framework ◽  
Production Function ◽  
Working Hours ◽  
Production Functions ◽  
Work Effort ◽  
Piece Rate

In this chapter, the author specifies production functions that allow for working hours to enter a firm’s production function in flexible ways. This helps an evaluation of hypotheses that have been used in the literature on working hours. These production functions include an extension to the familiar function associated with Cobb and Douglas. A second production function relates absolute differences in working hours to proportional differences in output. Work effort figures in the development of these production functions. Drawing upon research that investigates the consequences of paying workers by piece-rate methods, the author argues that work effort is an important dimension of the input of labor services.

Effects of task interdependence on the relationship between helping behavior and group performance.

2006 ◽  
Vol 91 (6) ◽  
pp. 1396-1405 ◽  
Author(s):  
Daniel G. Bachrach ◽  
Benjamin C. Powell ◽  
Brian J. Collins ◽  
R. Glenn Richey
Keyword(s):  
Group Performance ◽  
Helping Behavior ◽  
Task Interdependence ◽  
The Relationship

An Examination of the Relationships Among Monetary Incentives, Goal Level, Goal Commitment, and Performance

1992 ◽  
Vol 18 (4) ◽  
pp. 677-693 ◽  
Author(s):  
Patrick M. Wright
Keyword(s):  
Goal Attainment ◽  
Goal Commitment ◽  
Monetary Incentives ◽  
Piece Rate ◽  
Incentive Level ◽  
Goal Level ◽  
Class Scheduling ◽  
And Performance ◽  
The Relationship

This study tested the effects of incentive type, incentive level, and goal level on valence, goal commitment, and performance. Subjects (N=251) worked on a class scheduling task under either piece-rate, hourly, goal attainment bonus, or no-pay conditions, under either high or low amounts of money, and were assigned either easy, moderate, or difficult goals (a 4X2X3 design). Results demonstrated that both the level of valence and valence slope mediated the relationship between incentives and goal commitment. Incentive type, incentive level, and goal level interacted in determining performance, and these effects were not completely mediated by goal commitment.

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