Employee-Defined Commitment Contracts
Workers with self-control problems frequently experience present bias, causing procrastination and lower workplace productivity despite financial piece-rate incentives.
Picture this
A commitment contract acts like locking a smartphone inside a timed safe before starting a work session. By voluntarily selecting a daily production target that penalizes low output without offering additional monetary rewards for exceeding it, a worker creates a self-imposed financial boundary that forces immediate focus and deters slacking off.
What the evidence says
Workers voluntarily selected positive production targets 28% of the time, and choosing commitment contracts increased production by 120 fields (a 2% increase over the baseline of 5,311 fields), while evening target choices boosted earnings by 3%. Workers missed self-selected targets only 2.6% of the time compared to 8.6%–14.1% for firm-imposed targets.
- Who
- N = 102 data entry employees in Mysore, India.
- How
- Randomized Controlled Trial (RCT) evaluating four rotating contract treatments (status quo piece rate, employer-defined targets, morning self-set targets, and evening self-set targets) every 8 to 12 days.
What to do
Implement an opt-in daily task target system where employees can set binding minimum production quotas prior to starting a work shift with self-selected financial or operational penalties for underperformance.
From the source
"When given the opportunity to select their own work targets, workers selected positive targets approximately 28 percent of the time."
The Impact of Commitment Contracts on Workplace Productivity in India