Discussion paper

DP16282 When Bonuses Backfire: Evidence from the Workplace

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.


Sliwka, D, T Vogelsang and J Alfitian (2021), ‘DP16282 When Bonuses Backfire: Evidence from the Workplace‘, CEPR Discussion Paper No. 16282. CEPR Press, Paris & London. https://cepr.org/publications/dp16282