Pay for performance: When does it fail?

Author

Nirmalya KUMAR, Singapore Management UniversityFollow
Madan PILLUTLA, London Business School

Publication Type

Journal Article

Version

acceptedVersion

Publication Date

1-2021

Abstract

The consensus in social psychology is that monetary incentives for performance have a detrimental impact on individual performance. Yes, under certain specific and limited conditions, rewards can reduce performance. Yet pay for performance schemes are ubiquitous. How can we resolve this divergence between theoretical recommendations and observed practices? Nirmalya Kumar and Madan Pillutla recommend solving the problem by designing smarter incentives that avoid these detrimental effects.

Keywords

incentives, performance, compensation

Discipline

Human Resources Management

Research Areas

Marketing

Publication

Management and Business Review

First Page

45

Last Page

52

ISSN

2694-104X

Publisher

Institute for Knowledge and Technology Management

Citation

KUMAR, Nirmalya and PILLUTLA, Madan. Pay for performance: When does it fail?. (2021). Management and Business Review. 45-52.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6636

Copyright Owner and License

Authors

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.

Additional URL

https://mbrjournal.com/2021/01/21/pay-for-performance-when-does-it-fail/