Prizes, incentives, and motivational crowding-in

Question 1

Taxonomy of rewards distinguishes between prizes and incentives along four dimensions

Answer 1

Monetary content

Publicity

Degree of discretion

Purpose of the taskk

Question 2

Monetary content dimension

Answer 2

On the one hand, incentives typically have a monetary or material nature, and theiir size is often considered a rought index of their saliency. On the other hand, prizes are basically non-monetary, and if they also have an extrinsic value, the intrinsic or symbolic value hugely outweighs the extrinsic one

Question 3

Publicity dimension

Answer 3

(associated with the award) while incentives are usually handed out privately, prizes are regularly awared at public ceremonies, and these events are a quintessential aspect of any prize

Question 4

Degree of discretion Dimension

Answer 4

Degree of discretion in awarding the prize

Incentives are contingent, that is, they are defined ex-ante before the action to be incentivized occurs and often contractually, and therefore their award can be anticipated with certainty or in expected terms

Question 5

Purpose of the task dimension

Answer 5

To which prizes and incentives are applied to. A pure incentive in a typical employer-emplyee contract is designed to align the interests of the employee with those of the employer, with little if no regard to external effects that could be positive, negative, or neutral

Question 6

Self determination theory

Answer 6

the basic idea of self determination theory is that individuals within organizations accomplish tasts influenced by two types of motivations:

On the one hand they are motivated by the intrinsic goals of their work and activities; on the other hand they are motivated by the rewards the organization offer in exchange of their effort. Intrinsic motivation is often assumed to lead to better performance in certain kinds of jobs, to be particularly salient among a subset of the population, and to be directly unobservable by employers. Crucially, intrinsic motivation is interpreted as the willlingness to forgo external rewards in pursuit of the internal goals of ones work

Incentives also affect motivation through image concerns which is the “desire to be liked and respected by tohers and by ones self”

Question 7

When rewards are in the 1st reward phase are introduced, motivation increases in all treatments,

when rewards are made public performance increases

When rewards are purposeful, performance further increases