Faculty of Economics and Business Administration Publications Database
Team Incentives and Performance: Evidence from a Retail Chain
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| Authors: |
Krueger, Miriam
Zubanov, Nick
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| Source: | |
| ISSN-Print: |
0002-8282 |
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Online Version |
| Year: | 2017 |
| Abstract: | In a field experiment with a retail chain (1,300 employees, 193 shops), randomly selected sales teams received a bonus. The bonus increases both sales and number of customers dealt with by 3 percent. Each dollar spent on the bonus generates $3.80 in sales, and $2.10 in profit. Wages increase by 2.2 percent while inequality rises only moderately. The analysis suggests effort complementarities to be important, and the effectiveness of peer pressure in overcoming free-riding to be limited. After rolling out the bonus, treatment and control shops’ performance converge, suggesting long-term stability of the treatment effect. |
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