Strive for rewards or keep them accountable? Motivating employees’ effort and performance

Abstract

Organizations often turn to extrinsic motivators to improve employee effort and performance, with mixed results. In this research, performance-based benefits and accountability are explored to assess whether they differentially affect where effort is exerted and how they influence overall performance. The study proposes that effort can be divided into two components—strategic effort and execution effort—and that each component will influence overall performance differently. The study uses a scenario-based experiment involving a complex and unfamiliar task. The results indicate that workers motivated by performance-based benefits increase the use of strategic effort, which improves performance through the identification of critical problems, and they develop a better overall strategy relative to workers who are held accountable. The study also indicates that while accountability increased the use of execution effort, the additional effort did not improve performance in the complex task setting. The study highlights the importance of aligning an extrinsic motivator to the type of effort desired for a particular task.