| Compensation systems are purported to impact the work culture of an organization, company performance, and individual employee performance in a variety of ways. Since few well controlled experimental studies have fully examined these issues, many of the theories regarding the effectiveness of performance-based and traditional pay have gone untested. The purpose of this study was to evaluate task performance under different pay arrangements in a controlled laboratory setting. Specifically, experiment I compared performance under three types of pay systems: Hourly pay, Incentive pay (i.e., piece-rate pay), and Profit Share pay. Results indicated that performance-based systems increased behavior relative to hourly pay systems and that cooperative behaviors were more likely to occur under profit share and hourly contingencies than under incentive contingencies. Experiment II was conducted to determine if a higher magnitude of reinforcement would impact performance. Results suggested that the relative magnitude of reinforcement was not a major factor impacting productivity. However, cooperative behaviors were observed more frequently in the Incentive conditions in Experiment II relative to the cooperative behaviors observed in Experiment I. The relative magnitude of reinforcement, contingency and social control, and other procedural variables are discussed as factors influencing performance in the current study. |
