Group Incentives Research Articles

The Merit in Performance Pay: How Changing Teacher Compensation Can Increase the Supply of Quality Educators

There is no question that classrooms in US public schools do not function without an adult responsible for facilitating student learning. There is less agreement, however, regarding what constitutes quality instruction or what credentials an instructor should have in order to be considered a certified teacher. Low enrollment in teacher preparation programs combined with increasing teacher turnover rates have created a shortage of quality educators in districts across the country for high-need schools and subject areas. Educators, labor activists, and politicians have called for teacher compensation reform as a way to increase the teacher retention rate. This article summarizes research on the impact of individual and group incentive pay schemes on student achievement, reviews alternative financial incentives to retain exceptional educators, and evaluates policy proposals to improve teacher salaries from current and former 2020 presidential candidates.

When are efficient and fair assignment mechanisms group strategy-proof?

In the house allocation model, the literature (Bade, 2016; Zhang, 2019) have proven impossibility theorems regarding the compatibility of efficiency, fairness, and group non-manipulability if agents' preferences are unrestricted. Since in many applications not all preferences are possible, this paper examines to what extent these theorems still hold on restricted preference domains. We find that these theorems still hold unless the domains are restricted to have a special tier structure. We present several possibility theorems when the number of objects is restricted or when preference domains are restricted. This paper clarifies how strong the existing impossibility theorems actually are. As corollaries, we clarify the group incentive properties of Random Priority and Probabilistic Serial, the two mechanisms at the center of many studies.

The differing effects of individual and group incentive pay on worker separation: evidence using Finnish panel data

We investigate the role of individual incentive (II) and group incentive (GI) pay as determinants of worker separation using a large panel data set from Finland during 1997–2006. For white-collar workers, GI pay is associated significantly with an increased probability of separation (diminished employment stability), but in large firms only. For blue-collar workers, II pay is associated with a decreased probability of separation (enhanced employment stability), in both small and large firms. By providing results for different forms of performance pay in a single study, some of our findings are novel. In accounting for differences in our empirical findings compared to those in earlier studies, our results suggest that outcomes depend on the differing institutional contexts found in coordinated market economies (such as Finland) and liberal market economies.

An effective method for incentivizing groups implemented in a collaborative problem-based learning system to enhance positive peer interaction and learning performance

ABSTRACT Many studies have verified that the effective promotion of both positive interactions among individual group members and group accountability is a critical issue in collaborative problem-based learning (CPBL). This work, therefore, proposes a group incentive mechanism (GIM) that is based on considering several important factors that influence peers’ interactions and group accountability in collaborative learning to improve learning performance, interactive relationships, group efficacy, and the cohesiveness of groups of learners in a CPBL system. To evaluate the effectiveness of the proposed GIM, 48 Grade 4 students from two classess were recruited from an elementary school in Taoyuan City, Taiwan, to participate in an instruction experiment. Two classess were randomly assigned to the experimental group using CPBL with the proposed GIM and the control group using CPBL with the individual incentive mechanism (IIM) to solve a target problem collaboratively. Analytical results reveal that although the control group of learners with the IIM exhibited greater social interactions than the experimental group of learners with the proposed GIM, the experimental group exhibited better learning performance, group efficacy, and positive interactive relationships than the control group.

Policy Options for Retargeting the Canada Child Benefit

The Canada Child Benefit (CCB) is the nation’s second largest cash transfer program, and it contributes significantly to reducing child poverty. The program could be further targeted to poverty reduction either through federal program changes or by giving each province the discretion to vary its parameters on a cost-neutral basis. This article describes the CCB, documents the eight provincial child benefit programs, and investigates various scenarios for federal reform of or provincial variation in the CCB. The article presents simulated impacts of the cost-neutral policy scenarios on distribution and incentives for various groups, with a special focus on sole-parent families, and it assesses major related policy considerations.

A cold call on work-based learning: a “live” group project for the strategic selling classroom

PurposeThe purpose of this paper is to describe a case study used in a strategic sales class that employs the use of work-based learning pedagogy to expose students to real-life cold calling experiences. This real-life cold calling experience involves students within the course building a target list of prospective students for a small liberal arts college. The students must then construct pre-call strategies, build rapport with prospective students and finally “close the deal” by having the prospective student visit campus.Design/methodology/approachThis paper begins by describing work-based learning as a unique pedagogical method and the importance of cold-calling skills in the context of workplace skills in demand. Theoretical foundations in Lichtenstein and Lyon’s (1996) entrepreneurial skillset is analyzed, as is the application of “live” group projects. The case is then described in detail and focuses on the project itself, the personal and group incentives used in the course of the project, and finally, a review of the learning outcomes and desired skillset outcomes for the class.FindingsThe case shows that students can learn and implement the behaviors, attitudes and practices that make professional cold-callers successful. The impact on the university can also be seen since real contributions were made to the recruiting efforts of the collegevis-à-vishigher matriculation numbers. The entrepreneurial skillsets and “live” group project literature is contextualized in light of the findings of the project. This research found that students engaged in varying levels of progress in their managerial, entrepreneurial, technical skillsets as well as levels of personal maturity. Finally, the authors provide guidance for future research to expound the findings of this project by testing the variables using quantitative methodologies.Originality/valueThe paper showcases an innovative pedagogic approach to exposing students to the best practices of cold-calling and allows them to exercise these tools real time as they make actual cold calls and work toward sales incentives. The focus on recruiting new students as customers of the college serves is not only active classroom learning, but it also serves mission-based outcomes to help the college achieve desired recruiting goals. This case study will provide a tool for small, liberal arts colleges to use which mobilizes faculty and students in the effort to recruit new students, in an environment where enrollment numbers are falling for this market sector in higher education.

The Formation of Group Ties in Open Interaction Groups

We examine how task jointness and group incentive structures bear on the nature and strength of the affective and cognitive ties that people forge to a group. The argument is that affective group ties have stronger effects on social order than cognitive group ties. There are two general hypotheses. First, joint tasks generate stronger cognitive and affective ties to groups, whereas group incentives generate cognitive but not necessarily affective ties to the group. Second, affective ties more effectively solve two fundamental problems of social order in groups: (1) sustaining membership (also known as stay behavior) and (2) generating the joint gains of further collaboration (cooperation). The theoretical logic is that joint tasks promote a sense of shared responsibility, and this leads members to attribute their individual emotions to the group as an object, whereas alignment of individual and group incentives does not produce such effects. The theory and hypotheses are tested experimentally in four-person open interaction groups, manipulating task jointness (high, low, none) and incentives (individual based vs. group based). The results generally support the hypotheses underlying the theoretical logic. Affective ties to groups are based primarily on levels of task jointness, and such tasks have stronger effects than incentives on the capacity of groups to retain membership and induce cooperation in social dilemmas.

The effects of incentives, instructor motivation and feedback strategies on faculty evaluation response rates in large and small class sizes

Four instructor-led strategies designed to increase faculty teaching response rates were assessed across both small (n < 50) and large (n ≥ 50) class sizes. The interventions included: (a) individual incentives, (b) group incentives, (c) instructor motivation and (d) instructor motivation plus feedback. A comparison group utilizing the standard university strategies was also included in the study. The percentage of answers to open-ended or qualitative questions was measured across groups. The results show that implementing a contingency – whether group or individual – significantly improves the rate at which students complete course evaluation ratings regardless of class size; however, these contingencies, while effective for increasing overall rating response rate, do not promote increased submission rates of qualitative comments. Furthermore, it was found that class GPA did not differ across intervention strategy nor did it influence response rates.

The effect of individual and mixed rewards on diabetes management: A feasibility randomized controlled trial.

Background: Incentives play a role in introducing health-related benefits, but no interventions using mixed incentives, i.e. a combination of individual and group incentives, have been tested in individuals with type 2 diabetes mellitus (T2DM). We evaluated the feasibility of implementing individual- and mixed-incentives, with and without a supportive partner, on glycated haemoglobin (HbA1c) control and weight loss among patients with T2DM. Methods: This is a feasibility, sex-stratified, single-blinded, randomized controlled study in individuals with T2DM. All participants received diabetes education and tailored goal setting for weight and glycated haemoglobin (HbA1c). Participants were randomly assigned into three arms: individual incentives (Arm 1), mixed incentives-altruism (Arm 2), and mixed incentives-cooperation (Arm 3). Participants were accompanied by a diabetes educator every other week to monitor targets, and the intervention period lasted 3 months. The primary outcome was the change in HbA1c at 3 months from baseline. Weight and change body mass index (BMI) were considered as secondary outcomes. Results: Out of 783 patients screened, a total of 54 participants, 18 per study arm, were enrolled and 44 (82%) completed the 3-month follow-up. Mean baseline HbA1c values were 8.5%, 7.9% and 8.2% in Arm 1, Arm 2, and Arm 3, respectively. At 3 months, participants in all three study arms showed reductions in HbA1c ranging from -0.9% in Arm 2 to -1.4% in Arm 1. Weight and BMI also showed reductions. Conclusions: Individual and mixed cash incentives show important reductions in HbA1c, weight and BMI in patients with type 2 diabetes mellitus after 3 months. Recruitment and uptake of the intervention were successfully accomplished demonstrating feasibility to conduct larger effectiveness studies to test individual and mixed economic incentives for diabetes management. Registration: ClinicalTrials.gov Identifier NCT02891382.

Using Campus Presidential Debate Watch Events to Nudge: Enlisting Reference Group Leaders and Incentives in the Quest for Increasing Student Political Participation and Efficacy

In presidential election years such as 2016, colleges and universities across the country devote substantial time and resources to student debate watch events in hopes of engaging students in the election and of generally enhancing political engagement. Few studies examine the effectiveness or potential role of such events for college students’ political participation, however. We used student leaders and attendance incentives to encourage student turnout at campus debate watch events among members of campus Greek organizations. In a quasi-experiment with attendance at campus debate events as the intervention, we explored differences between students watching debates at sponsored events with comparison groups who exclusively watched debates elsewhere. Additional groups of interest included nonwatchers and “nudged” watchers who attended a campus event to view only one debate. Based on surveys of undergraduate Greek organization members, we found a strong culture of political participation and efficacy related to the fall 2016 elections in both intervention and comparison groups, in stark contrast to those who did not watch any debates. Most importantly, a third group of “nudged” debate watchers voted and registered at higher rates than nonwatchers. Follow-up interviews with randomly selected students from a volunteer pool provided additional data. Results indicate that universities can serve as choice architects and deliberative facilitators with the potential to increase students’ political participation. As such, colleges and universities may want to devote resources toward: (1) providing incentives for students to attend coordinated presidential debate watch events that feature registration and voting resources and (2) engaging student reference group leaders in marketing and facilitating debate watch events.

The effect of individual and mixed rewards on diabetes management: A feasibility randomized controlled trial

Background: Incentives play a role in introducing health-related benefits, but no interventions using mixed incentives, i.e. a combination of individual and group incentives, have been tested in individuals with type 2 diabetes mellitus (T2DM). We evaluated the feasibility of implementing individual- and mixed-incentives, with and without a supportive partner, on glycated haemoglobin (HbA1c) control and weight loss among patients with T2DM. Methods: This is a feasibility, sex-stratified, single-blinded, randomized controlled study in individuals with T2DM. All participants received diabetes education and tailored goal setting for weight and glycated haemoglobin (HbA1c). Participants were randomly assigned into three arms: individual incentives (Arm 1), mixed incentives-altruism (Arm 2), and mixed incentives-cooperation (Arm 3). Participants were accompanied by a diabetes educator every other week to monitor targets, and the intervention period lasted 3 months. The primary outcome was the change in HbA1c at 3 months from baseline. Weight and change body mass index (BMI) were considered as secondary outcomes. Results: Out of 783 patients screened, a total of 54 participants, 18 per study arm, were enrolled and 44 (82%) completed the 3-month follow-up. Mean baseline HbA1c values were 8.5%, 7.9% and 8.2% in Arm 1, Arm 2, and Arm 3, respectively. At 3 months, participants in all three study arms showed reductions in HbA1c ranging from -0.9% in Arm 2 to -1.4% in Arm 1. Weight and BMI also showed reductions. Conclusions: Individual and mixed cash incentives show important reductions in HbA1c, weight and BMI in patients with type 2 diabetes mellitus after 3 months. Recruitment and uptake of the intervention were successfully accomplished demonstrating feasibility to conduct larger effectiveness studies to test individual and mixed economic incentives for diabetes management. Registration: ClinicalTrials.gov Identifier NCT02891382

Simplicity Creates Inequity: Implications for Fairness, Stereotypes, and Interpretability

Algorithms are increasingly used to aid, or in some cases supplant, human decision-making, particularly for decisions that hinge on predictions. As a result, two additional features in addition to prediction quality have generated interest: (i) to facilitate human interaction and understanding with these algorithms, we desire prediction functions that are in some fashion simple or interpretable; and (ii) because they influence consequential decisions, we also want them to produce equitable allocations. We develop a formal model to explore the relationship between the demands of simplicity and equity. Although the two concepts appear to be motivated by qualitatively distinct goals, we show a fundamental inconsistency between them. Specifically, we formalize a general framework for producing simple prediction functions, and in this framework we establish two basic results. First, every simple prediction function is strictly improvable: there exists a more complex prediction function that is both strictly more efficient and also strictly more equitable. Put another way, using a simple prediction function both reduces utility for disadvantaged groups and reduces overall welfare relative to other options. Second, we show that simple prediction functions necessarily create incentives to use information about individuals' membership in a disadvantaged group—incentives that weren't present before simplification, and that work against these individuals. Thus, simplicity transforms disadvantage into bias against the disadvantaged group. Our results are not only about algorithms but about any process that produces simple models, and as such they connect to the psychology of stereotypes and to an earlier economics literature on statistical discrimination.

The effect of individual and mixed rewards on diabetes management: A feasibility randomized controlled trial

Background:Incentives play a role in introducing health-related benefits, but no interventions using mixed incentives, i.e. a combination of individual and group incentives, have been tested in individuals with type 2 diabetes mellitus (T2DM). We evaluated the feasibility of implementing individual- and mixed-incentives, with and without a supportive partner, on glycated haemoglobin (HbA1c) control and weight loss among patients with T2DM.Methods:This is a feasibility, sex-stratified, single-blinded, randomized controlled study in individuals with T2DM. All participants received diabetes education and tailored goal setting for weight and glycated haemoglobin (HbA1c). Participants were randomly assigned into three arms: individual incentives (Arm 1), mixed incentives-altruism (Arm 2), and mixed incentives-cooperation (Arm 3). Participants were accompanied by a diabetes educator every other week to monitor targets, and the intervention period lasted 3 months. The primary outcome was the change in HbA1c at 3 months from baseline. Weight and change body mass index (BMI) were considered as secondary outcomes.Results:Out of 783 patients screened, a total of 54 participants, 18 per study arm, were enrolled and 44 (82%) completed the 3-month follow-up. Mean baseline HbA1c values were 8.5%, 7.9% and 8.2% in Arm 1, Arm 2, and Arm 3, respectively. At 3 months, participants in all three study arms showed reductions in HbA1c ranging from -0.9% in Arm 2 to -1.4% in Arm 1. Weight and BMI also showed reductions.Conclusions:Individual and mixed cash incentives show important reductions in HbA1c, weight and BMI in patients with type 2 diabetes mellitus after 3 months. Recruitment and uptake of the intervention were successfully accomplished demonstrating feasibility to conduct larger effectiveness studies to test individual and mixed economic incentives for diabetes management.Registration: ClinicalTrials.gov IdentifierNCT02891382

The effect of individual and mixed rewards on diabetes management: A feasibility randomized controlled trial

Background: Incentives play a role in introducing health-related benefits, but no interventions using mixed incentives, i.e. a combination of individual and group incentives, have been tested in individuals with type 2 diabetes mellitus (T2DM). We evaluated the feasibility of implementing individual- and mixed-incentives, with and without a supportive partner, on glycated haemoglobin (HbA1c) control and weight loss among patients with T2DM. Methods: This is a feasibility, sex-stratified, single-blinded, randomized controlled study in individuals with T2DM. All participants received diabetes education and tailored goal setting for weight and glycated haemoglobin (HbA1c). Participants were randomly assigned into three arms: individual incentives (Arm 1), mixed incentives-altruism (Arm 2), and mixed incentives-cooperation (Arm 3). Participants were accompanied by a diabetes educator every other week to monitor targets, and the intervention period lasted 3 months. The primary outcome was the change in HbA1c at 3 months from baseline. Weight and change body mass index (BMI) were considered as secondary outcomes. Results: Out of 783 patients screened, a total of 54 participants, 18 per study arm, were enrolled and 44 (82%) completed the 3-month follow-up. Mean baseline HbA1c values were 8.5%, 7.9% and 8.2% in Arm 1, Arm 2, and Arm 3, respectively. At 3 months, participants in all three study arms showed reductions in HbA1c ranging from -0.9% in Arm 2 to -1.4% in Arm 1. Weight and BMI also showed reductions. Conclusions: Individual and mixed cash incentives show important reductions in HbA1c, weight and BMI in patients with type 2 diabetes mellitus after 3 months. Recruitment and uptake of the intervention were successfully accomplished demonstrating feasibility to conduct larger effectiveness studies to test individual and mixed economic incentives for diabetes management. Registration: ClinicalTrials.gov Identifier NCT02891382.

Authority and communication in firms

We show that decision making in organizations is typically more complicated than simply choosing either to delegate or to centralize. Firms have to consider not only the level at which a decision is made (authority location) but also how many people are involved (authority diffusion), and the type of communication. Utilizing a unique data set, we estimate a latent-class model to identify frequently adopted combinations of decision-making rights and communication across different hierarchical levels relating to the implementation of a significant change. We identify four typical authority/communication structures that can be loosely categorized as: authoritarian centralization; team decision making; consultative centralization; and decentralization. We then explore the relationships between these four authority/communication structures and other characteristics of the firm, such as the size of the organization, worker skills, long-term employer-employee relationships, individual and group incentives and how close the firm is to the productivity frontier. These results are broadly consistent with recent advances in theory, although no one model is rich enough to fully describe all our findings.

Effects of Different Incentive Distribution Methods on Work Performance and Satisfaction in Small Groups: a Simulation Study

This study examined the relative effects of different monetary incentive distribution methods on work performance and satisfaction in small groups. Three types of incentive plans were compared: individual incentives, equally distributed group incentives (EG), and differentially distributed group incentives (DG). Four participants performed a simulated work task for 21 four-hour sessions. An alternating treatment design was adopted, and three experimental conditions randomly alternated for each session. The main dependent variables were the number of correctly completed work tasks and amount of off-task time. Results indicated that performance under DG was higher than that of EG and the individual incentives condition. However, the EG and individual incentive conditions had the similar levels of performance. The amount of off-task time was higher in the EG condition than in the other two conditions. In addition, the error rates did not differ across the three incentive conditions, whereas satisfaction and fairness ratings were the highest for individual incentives. Finally, implications for researchers and practitioners, along with limitations of the study, are discussed.

Extractive states: The case of the Italian unification

Despite the huge evidence on the adverse impact of extractive policies, we still lack a formal framework to identify their origins and role. Here, we lay out a two-region, two-social class model for thinking about this issue, and we exploit its implications to propose a novel account of the present-day divide between North and South of Italy. To illustrate, we document that it also arose because of the region-specific policies selected between 1861 and 1911 by the elite of the Kingdom of Sardinia, which unified Italy in 1861. While pre-unitary revenues from land property taxes and railway diffusion were shaped by each region's farming productivity but not by its political relevance for the Piedmontese elite, the opposite was true for the post-unitary ones. Moreover, tax distortions and the severity of all the other extractive policies are related to the growing post-unitary divide in culture and literacy, but not to the gap in the manufacturing industry value added. These two sets of results imply that extraction has neither eased the formation of a unitary market nor favored industrialization. Reassuringly, we reach similar conclusions when we consider region fixed effects and time dummies whether interacted or not with the structural conditions differentiating the two blocks of regions in 1861, i.e., inclusiveness of political institutions, land ownership fragmentation, and inputs. Crucially, our framework sheds light on the incentives of other groups dominating political and economic unions, e.g., Germany within the post-crisis EU.

Forest Preservation Under REDD+ Schemes With Incentives Distortions

This analysis is based on a model of REDD+ implementation where a sponsor, assumed to be either “benevolent” (altruistic) a toward farmers, or completely selfish, compensates a farmer for the protection of a patch of rainforest under the latter's control. This model is applied to cases with less effective (“diluted”) incentives, in two ways: the sponsor must compensate all farmers in a group instead of only the single farmer targeted (“group incentives”); and a fraction of REDD+ payments is captured by an elite not directly involved in forest protection, and not worthy of support by a benevolent sponsor (“elite capture”). I extend the traditional REDD+ literature by including “benevolent” sponsors who are fully concerned with the welfare of the target (farmer) group. Payments are then increased, perhaps dramatically; but reduced by a selfish sponsor. An efficient solution can then be attained by a benevolent sponsor, albeit only for a high PES payment. With elite capture, payments are reduced for all sponsors, and full efficiency never attained. With selfish sponsors no viable PES scheme may exist. When the group incentive scheme rewards only farmers who save their forests, incentives are not eroded by the scheme.

Person-based differences in pay reactions: A compensation-activation theory and integrative conceptual review.

Compensation research has focused traditionally on how pay design characteristics (e.g., pay level, individual or group incentives) relate to average employee outcomes and, in toto, on how these outcomes affect organizational performance. Recently, scholars have begun to pay more attention to how individuals vary in the strength of their reactions to pay. Empirical research in several disciplines examines how the interplay of pay systems and person-based characteristics (psychological individual differences, demographics, and relative performance or position in a group) relate to important work-related outcomes. We develop a compensation-activation theory that frames compensation design characteristics as workplace "situations" providing cues that activate individuals' corresponding fundamental social motives made salient due to chronic or transient person-based characteristics. Where activation occurs, stronger-than-average responses to the compensation "situation" are expected. Using the theory as a lens, we synthesize and reinterpret existing research on person-based reactions to pay characteristics, including sorting, incentive/motivational effects, and effects on collective pay system reactions and unit/organizational outcomes. We conclude with a research agenda aimed at refining compensation-activation theory and advancing the study of compensation as it affects individual and organizational outcomes. (PsycINFO Database Record

On the definition and comparability of individual and group incentives for environmental conservation

Incentive payments for conservation activities, also known as Payment for Environmental Services (PES), are increasingly being adopted worldwide (Salzman, Bennett, Carroll, Goldstein, & Jenkins, 2018). However, if land is under joint ownership, payments conditional on individual performance are either too costly or impossible to implement. This is also the case if activities are difficult to monitor at the individual level and/or ecosystem services are only observed on an aggregate level (Engel, 2016). In other cases, where both group and individual performance-based payments are feasible, the question arises as to which of the two types lead to better conservation outcomes. Table 1 illustrates four combinations of performance-based payments with respect to the conditionality and the recipient. Payments can be made either to a group or to individuals and can be conditional on the individual or the group performance. As three combinations include a collective dimension (categories A, B, C in Table 1), we consider these as group payments. Gatiso, Vollan, Vimal, and Kühl (2018, hereafter GVVK) implement two group treatments (A and B) and compare them to fully individual payments (D) with the result that conservation effort is highest with D > B > A.1 Peer effects within the group that increase compliance with conservation. Free-riding incentives since non-complying individuals can benefit from group payments while not bearing the cost for conservation. This represents a classical social dilemma situation. In their response to GVVK, Salk and Travers (2018, hereafter ST) argue that the comparison by GVVK between type B and D is not entirely reasonable due to higher free-riding incentives in B. They state that any ceteris paribus comparison between group (B) and individual conditionality (D) should solely differ with regards to peer effects and not to peer effects and free-riding incentives. As pointed out by ST, peer effects are indisputably a strong driver of compliance in group settings. However, we argue that any group conditionality also inherently introduces free-riding incentives. Therefore, ceteris paribus comparisons as advocated by ST provide little evidence for real-world PES schemes. Economic experiments are being increasingly applied as they are useful tools to single out specific aspects of PES (e.g., Andersson et al., 2018). Nevertheless, when looking at the positives of group conditionality (peer effects), we should not forget the negatives (free-riding incentives in groups). For policy recommendations, the relative importance of the two effects depends on the specific context at hand. Future research could look into the various aspects behavioral economists and others have identified to harness peer effects (e.g., Midler, Pascual, Drucker, Narloch, & Soto, 2015) and how these can be introduced in group-performance PES schemes.