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The Effect of Task Interdependence and Type of Incentive Contract on Group Performance
Journal article   Peer reviewed

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

Ronald N. Guymon, Ramji Balakrishnan and Richard M. Tubbs
Journal of management accounting research, Vol.20(s1), pp.1-18
01/01/2008
DOI: 10.2308/jmar.2008.20.s-1.1
url
https://autopapers.ssrn.com/sol3/papers.cfm?abstract_id=1113199View
Open Access

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.
Social Sciences Business & Economics Business, Finance

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