Cash, non-cash, or mix? Gender matters! The impact of monetary, non-monetary, and mixed incentives on performance

Hanna M. Sittenthaler, Alwine Mohnen
2020 Zeitschrift für Betriebswirtschaft  
Standard economic theory asserts that cash incentives are always better than non-cash ones, or at least not worse. This study employs a real effort experiment to analyze the impact of monetary, non-monetary, and a combination of monetary and non-monetary incentives on performance, where non-monetary incentives are defined as tangible incentives with market value. Our overall results suggest that there exists no significant difference in performance in response to monetary, non-monetary, and
more » ... n-monetary, and mixed incentives. However, gender-based differentiation reveals a different picture: the performances of men and women depend upon the type of incentive used. Whereas men's performance is significantly higher in response to monetary incentives compared to non-monetary ones, women's performance is significantly higher in response to nonmonetary incentives. The gender differences in the effectiveness of monetary and non-monetary incentives do not seem to be triggered by the perceived attractiveness of the non-monetary incentives but rather by the differences between men and women in the feelings of appreciation and perceived performance pressure in a tournament setting. Therefore, our results indicate that gender differences must be considered when implementing incentives.
doi:10.1007/s11573-020-00992-0 fatcat:zt6y53hzfvaphevhzypotb4pua