Discussion Paper Details

Please find the details for DP16282 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: When Bonuses Backfire: Evidence from the Workplace

Author(s): Jakob Alfitian, Dirk Sliwka and Timo Vogelsang

Publication Date: June 2021

Keyword(s): Absenteeism, Compensation, Crowding-Out, field experiment, monetary incentives and time-off incentive

Programme Area(s): Organizational Economics

Abstract: Monetary incentives are widely used to align employees' actions with the objectives of employers. We conduct a field experiment in a retail chain to evaluate whether an attendance bonus reduces employee absenteeism. The RCT assigned 346 apprentices for one year to either a monetary attendance bonus, a time-off bonus or a control group. We find that neither form of the bonus reduced absenteeism, but the monetary bonus increased absence by around 45%. This backfiring effect is persistent and driven by the most recently hired apprentices. Survey results reveal that the bonus shifted the perception of absenteeism as acceptable behavior.

For full details and related downloads, please visit:

Bibliographic Reference

Alfitian, J, Sliwka, D and Vogelsang, T. 2021. 'When Bonuses Backfire: Evidence from the Workplace'. London, Centre for Economic Policy Research.