The Effect of Financial Incentives on Task Attractiveness and Individual Performance

Timea Gal,Putri Purwaningtyas,Ascaryan Rafinda,Ascariena Rafinda

doi:10.20884/1.jp.2021.28.01.3667

Timea Gal, Putri Purwaningtyas + Show 2 more

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https://doi.org/10.20884/1.jp.2021.28.01.3667

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Abstract

The purpose of this paper is to examine the effect of monetary incentives on unattractive task. Pre-test and post-test were conducted to examine the effect of monetary incentives on unattractive task. The data generated from University Student in Indonesia. Total 53 participant follow two stages of the experiment to do the assignment. The first stage to examine individual performance in the assignment without incentives and the second stage is the treatment group. One group with financial incentives while another group without financial incentives. The T-Test was examining to evaluate the difference between pre-test and post test result. The result shows that monetary incentives could not change people perceived of unattractive task become attractive and could not increase individual performance in unattractive task. But people that perceived the assignment as attractive, they improve the performance when there are monetary incentives. This research found that money could not shift people perception on task attractiveness.

Highlights

Financial incentive is the extrinsic motivator that based on individual performance
The results of this study show that financial incentives more effective in improving performance under conditions less complicated and less attractive compared with the attractive task and complex task
The results show that financial incentives more effectively improve individual performance in conditions unattractive task compared with the attractive task

Summary

Introduction

Financial incentive is the extrinsic motivator that based on individual performance. Even financial incentives have both effect increasing motivation to perform, its belief encourage professional misconduct (Tayan, 2019). Incentives are the easiest tools for motivating and improving individual performance (Atkinson et al, 2001). Incentive schemes used to motivate individuals to generate more effort, which increased individual performance (Bonner et al, 2000). Baker et al (1998) stated that the compensation based on incentive is typically used to align the interests of employees and the employer. The critical role of management accounting in compensation practices is to provide information that is useful in evaluating individual performance and motivate individuals to improve their performance (Bonner et al, 2000)

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