Salience-Driven Compensation Capture
RCTReview
When incentive structures rely solely on end-of-month bonus calculations, time-inconsistent employees frequently fail to optimize their effort timing, resulting in missed commission thresholds and forfeited earnings.
Picture this
Imagine a coin-operated arcade game where small flashing lights remind players to press a bonus button at key moments. Even if the button was always there, the visual cues prompt players to claim extra points they previously ignored.
What the evidence says
Total worker compensation increased by 25% to 30% (COP 334,133 to COP 421,469 / USD $152–$191 per month, p < 0.01; bonus increase coef = 203,042 to 228,628 COP, p < 0.01) despite weekly prizes representing only 2% of salary (COP 30,000 / USD $15 gift certificates).
- Who was studied
- N = 388 loan officers (mean age 29.4 years, 47% female, average 15 years education) across 61 bank branches in Colombia; individual compensation panel data from June 2008 to April 2009 (N = 4,716 person-month observations).
- How
- OLS fixed-effects panel regression estimating treatment impact on total monthly salary plus commission bonus, controlling for worker demographics and branch fixed effects.
What to do
Combine existing financial bonus structures with low-cost weekly symbolic awards and high-frequency progress feedback to increase worker task execution and commission capture.
From the source
"On average, loan officer compensation -independent of program prizes- increased by 25% per month. This is much in excess of the monetary value provided by the prizes and thus suggests that loan officers were leaving money on the table before the intervention."
Fighting Procrastination in the Workplace- An Experiment.pdf