Effects of and Preference for Pay for Performance: An Analogue Analysis

We examined the effects of 2 payment systems on the rate of check processing and time spent on task by participants in a simulated work setting. Three participants experienced individual pay-for-performance (PFP) without base pay and pay-for-time (PFT) conditions. In the last phase, we asked participants to choose which system they preferred. For all participants, the PFP condition produced higher rates of check processing and more time spent on task than did the PFT condition, but choice of payment system varied both within and across participants. (Contains 2 figures.)