Hard Facts: Incentives

More wisdom from Hard Facts:

We … [did] research to discover if courteous clerks fueled sales.  … We ultimately found little if any evidence that courtesy increased store sales. …The main finding … was that clerks in stores with more sales were actually less courteous.  Apparently, the crowding and long lines in busy stores make clerks and customers grouchy. (p.39)

A survey of more than 200 human resource professionals from companies employing more than 2500 people … found that even though more than half of the companies used forced rankings, the respondents reported that forced ranking resulted in lower productivity, inequity and skepticism, negative effects on employee engagement, reduced collaboration, and damage to morale and mistrust in leadership. (p.107)

Individuals believe that others are motivated by money, even as they know that they are much less so. … A survey … of almost 500 prospective lawyers … revealed that 64 percent … said they were pursuing a legal career because it was intellectually appealing or because they were interested in the law, but only 12 percent thought their peers were similarly motivated.  Instead 62 percent thought that others were pursuing a legal career for the financial rewards. (p.115)

A survey of 205 executives from diverse industries found that 68 percent reported their companies had executive bonus plans because senior management believed tthat such plans would motivate executives.  These same executives reported, however, that they did not make daily business decisions based on how such decisions would affect either their bonus or those of other people. (p.116)

Students who are in school or who have chosen a major for instrumental reasons – in order to get a better job or to make more money – are much more likely to cheat than students who have chosen a course of study because of their interest in in the subject matter.  (p.124)

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  • Matt

    Have you ever made this many posts based on a single book? Should we interpret this as a particularly strong recommendation? You should have probably set up an affiliate link unless you are making these posts as you are reading, in which case you should probably set up an affiliate link now and retrofit your previous links.

  • Adam

    These are all interesting results but for some of them I’m not sure what conclusions to draw.

    Examples: if I own a store, should I make a point to encourage my clerks to be courteous or to hire courteous clerks? Maybe it won’t increase sales, but will it increase profits?

    Re forced rankings: the respondents reported all kinds of negative effects, but what to make of that? Maybe their subjective opinion is that this fosters bad feelings, but what evidence is there either way about how forced ranking contribute (or hinder) effectiveness?

    Re bonuses: the executives REPORT that the bonuses have no effect on their decisions, but what do they DO? Where is the evidence of how the bonuses affect their behavior? If the claim is that monetary bonuses do not create incentives for behavior, then that is an extraordinary claim that would (imho anyway) require a lot of evidence to back it up.

  • Greg Conen

    >Individuals believe that others are motivated by money, even as they know that they are much less so.

    Are they wrong about others, or about themselves? After all, caring about money would be low status.

    • Why would caring about money be low-status without extra information? Many high-status institutions care a lot about money. Is it more likely that they are wrong about themselves because they see themselves as being more moral rather than higher-status? Why must everything revert to status, even non-identifiable survey information?

    • People are rarely motivated by relatively small differences in money. But anyone who tells you he is not motivated by money is lying – I have seen almost no one who would stay at their current job without getting paid specifically for it.

  • May we ask how many pages are in this tome and whether you are going to cut and paste all of them?

    These examples are not so much “hard facts” as they are somewhat apparent “truisms”. I liken them to “old wives tales” – there may be some truth to them, but maybe not. Judging by the scant number of comments to these posts, most of your readers feel the same way.

    Was there a page on futarchy? (just kidding)!

  • lena

    does this mean that taxing high income earners more will not result decreased motivation to work?

  • I doubt the self-reports are accurate, but I think it’s worth blogging anyway to highlight the disparity between what people say about themselves vs others. Similarly, most people think that they are above-average drivers and that crime is up everywhere except their own neighborhoods.

  • Rich Rostrom

    So the majority of law students profess idealistic motives for pursuing that profession, while imputing base motives to their peers.

    One wonders which perception is accurate, or honest.

    As for executive bonuses: it’s presumed that the executive, in making a decision, always pursues the best interests of the company. That’s his job, bonus or no bonus. Where the bonus comes in is getting him to work harder at getting that decision right (or making more decisions): it’s a reward for extraordinary performance.

  • Pingback: The instrumental bias of our peers « Just the Facts()

  • J

    “clerks in stores with more sales were actually less courteous”

    I’m not surprised One of the things that has always mystified me about the retail industry is why they ignore basic realities of human behavior and intentionally drive half of their potential customers out the door in the name of customer service. Specifically, is there anybody on this planet who is unaware that unsolicited “assistance” is one of the most corrosively annoying things a man can experience? A store that orders their salespeople to relentlessly harrass male customers with offers of unwanted help is going to suffer; ask Circuit City.