Social Incentives in the Workplace

By O. Bandiera, I. Barankay, Imran Rasul. Social Science Research Network, 2010

533 citations recorded by the source corpus.

We present evidence on social incentives in the workplace, namely on whether workers' behaviour is affected by the presence of those they are socially tied to, even in settings where there are no externalities among workers due to either the production technology or the compensation scheme in place. To do so, we combine data on individual worker productivity from a firm's personnel records with information on each worker's social network of friends in the firm. We find that compared to when she has no social ties with her co-workers, a given worker's productivity is significantly higher when she works alongside friends who are more able than her, and significantly lower when she works with friends who are less able than her. As workers are paid piece rates based on individual productivity, social incentives can be quantified in monetary terms and are such that (i) workers who are more able than their friends are willing to exert less effort and forgo 10% of their earnings; (ii) workers who have at least one friend who is more able than themselves are willing to increase their effort and hence productivity by 10%. The distribution of worker ability is such that the net effect of social incentives on the firm's aggregate performance is positive. The results suggest that firms can exploit social incentives as an alternative to monetary incentives to motivate workers.

Subfields: Economics and Econometrics, Gender Studies

View Paper: https://www.semanticscholar.org/paper/bd70e67c6adcd311208e708526f0cd87f2580987

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Gender Studies

Citations in the corpus

Saving more in groups: Field experimental evidence from Chile (2018, background): “Peer effects have been widely shown to affect behavior, for example, with respect to productivity at work (e.g., Falk and Ichino, 2005; Mas and Moretti, 2009; Bandiera et al., 2010), alcohol consumption (e.”
The Effects of Training on Own and Co-Worker Productivity: Evidence from a Field Experiment (2011, unknown): “2009; Mas and Moretti 2009; Bandiera et al. 2010; De Grip et al. 2011). Training externalities have important implications for investments in further training. If training has positive externalities, firms can benefit from targeting a subgroup of workers for training instead of training all workers.”
Peer effects in science: evidence from the dismissal of scientists in Nazi Germany (2012, background): “[5] Bandiera, Oriana, Iwan Barankay, Imran Rasul (2010) "Social Incentives in the Workplace", The Review of Economic Studies, vol.”
The Impact of Pollution on Worker Productivity (2012, unknown): “A growing body of evidence suggests that piece rates reduce shirking and increase productivity over hourly wages and relative incentive schemes, particularly in agricultural settings (Bandiera, Barankay, and Rasul 2005, 2010; Lazear 2000; Paarsch and Shearar 1999, 2000; Shi 2010).”
Field experiments in labor economics (2010, background): “31 sizes in Bandiera et al. (2010)?”
The 1/d Law of Giving (2010, background): “1 E.g., Bandiera, Barankay, and Rasul (2007) , Calvo-Armengol, Patacchini, and Zenou (2005), Conley and Udry (2005), Glaeser, Sacerdote, and Scheinkman (1996), Granovetter (1994), and Topa (2001).”
Under-Savers Anonymous: Evidence on Self-Help Groups and Peer Pressure as a Savings Commitment Device (2012, background): “Peer effects have been widely shown to affect behavior, for example with respect to productivity at work (e.g., Falk and Ichino, 2005; Mas and Moretti, 2009; Bandiera et al., 2010), alcohol consumption (e.”
Peer Effects in the Workplace (2017, unknown): “Such shocks turn out to be important: When adding time-varying firm fixed effects ( 𝛿 𝑗𝑡 in equation (4)) in column (3), we find that a 10% increase in peer quality raises individual wages by merely 0.1%.”
The Morale Effects of Pay Inequality (2016, unknown): “A set of related studies examines the effects of revealing performance ranks to piece rate workers, indicating that social comparisons may matter for effort even in the absence of incomplete contracting (Blanes i Vidal and Nossol 2011, Bandiera et al. 2013, Barankay 2016). 11In contrast to our focus”