The Effect of Noise in a Performance Measure on Work Motivation: A Real Effort Laboratory Experiment

Abstract

This paper reports the results of an individual real e¤ort laboratory experiment where subjects are paid for measured performance. Measured performance equals actual performance plus noise. We compare a stable environment where the noise is small with a volatile environment where the noise is large. Subjects exert signi…cantly more e¤ort in the volatile environment than in the stable environment. This …nding is in line with standard agency theory and contrasts a distinct element of expectancy theory; noisier performance measures do not lower work motivation.

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@inproceedings{Sloof2008TheEO, title={The Effect of Noise in a Performance Measure on Work Motivation: A Real Effort Laboratory Experiment}, author={Randolph Sloof and C. Mirjam van Praag and Mirjam van Praag}, year={2008} }