Thursday, November 16, 2017

A little puzzle about gift exchange and pay for performance from our class

Sometimes there are natural experiments done that produce data and then let economists (and other social scientists) try to explain the findings with some plausible theoretical explanation.  In our class we have had such a natural experiment. 

Early on there were class session evaluations that students would receive 5 points for completing.  There were closed ended questions that were required and an optional paragraph question for comments, meaning students didn't have to comment to receive the 5 points.  Yet many students did, in fact, post a comment, some with high frequency.  In the language of the class, those comments were gifts (to me). You would know better than I would about the motivation for writing such a comment. 

Since we ended the class session evaluations, students have had the option of posting a comment on the Feedback Tab at the class site.  This is one click away from the homepage.  So, regarding effort, I would interpret that as pretty minimal.  It would seem that if you were inclined to give a gift in the form of a comment, you'd still be doing that.  Yet nobody has submitted such a comment.  It's as if by going from session evaluations to this other method, I shut down the comment pipeline. 

That observation offers a puzzle.  You might explain things by outside factors, such as where we are in the semester.  (The number of people completing the class session evaluations had been declining.)  Another possibility, however, is that you have to initiate the activity before you get into gift giving mode and the 5 points bonus as incentive was needed to get you to initiate.   This is one where students reflecting on their own motivation might shed some light on what explains things.  You know what drives you better than I do.

If the need to initiate offers the better explanation, then you might take this finding and ask what it tells a manager.  How often must the manager provide some carrot for employees so they reinitiate?  Also, what carrots make sense here?  We talked about employees on a salary not bearing income risk.  Are there other carrots that might be used if such an employee seems stuck in rut and needs to resume working at a high level?


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