When Bonuses Backfire: Evidence from the Workplace

Jakob Alfitian, Dirk Sliwka and Timo Vogelsang

Natural Field Experiments from The Field Experiments Website

Abstract: Monetary incentives are widely used to align employees' actions with the objectives of employers. We conduct a field experiment in a retail chain to evaluate whether an attendance bonus reduces employee absenteeism. The RCT assigned 346 apprentices for one year to either a monetary attendance bonus, a time-off bonus or a control group. We find that neither form of the bonus reduced absenteeism, but the monetary bonus increased absence by around 45%. This backfiring effect is persistent and driven by the most recently hired apprentices. Survey results reveal that the bonus shifted the perception of absenteeism as acceptable behavior.

Date: 2021
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-hrm
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Persistent link: https://EconPapers.repec.org/RePEc:feb:natura:00725

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