The Effects of Objective Feedback
on Performance When Individuals
Receive Fixed and Individual
Incentive Pay
Douglas A. Johnson, Alyce M. Dickinson, and Bradley E. Huitema

Individual monetary incentives have been shown
to improve performance (Condly, Clark, &Stolovitch, 2003; Jenkins, Gupta, Mitra, & Shaw,
1998) and are also quite prominent in businessand industry (Dickinson, 2005; Ledford, Lawler, &Mohrman, 1995). Hewitt Associates (2002, 2005), forexample, found that 45–47 percent of more than
1,000 companies surveyed had incentive systems
where rewards were based on speciﬁc employee
performance criteria.
The prominence of individual incentive systems
is an indicator that they should be an importantresearch topic for performance improvement researchers. In spite of this, however, empiricalresearch has been sparse. In 1998, Jenkins andcolleagues were able to locate only 39 studies fortheir meta-analytic review of the effects of individual
ﬁnancial incentives on performance. Similarly,
when Bucklin and Dickinson (2001) reviewed theeffects of individual monetary systems, they wereable to identify only three thematic lines of research,with just a few studies in each thematic line.
They found ﬁve studies that had systematicallyexamined the effects of the percentage of basepay or total pay that was incentive-based, eight that
had examined the effects of various schedules of
incentive delivery, and two that had examined

We examined whether objective
feedback would enhance performance when individuals were paidmonetary incentives. A two-by-two
factorial design was used, with 123
college students assigned to incentive
pay without feedback, incentive pay
with feedback, fixed pay without
feedback, or fixed pay with feedback.
Participants attended six sessions andentered the cash value of simulatedbank checks presented on a computer. Two-factor ANCOVAs were used
to determine whether the number ofchecks completed correctly and timespent working differed. The numberof checks completed correctly duringa pretest was used as the covariate tocontrol for keyboard proficiency. Incentives increased the number ofchecks completed correctly by 34
percent (po.001, standardized effectsize 5 .91); however, feedback had
no effect (p 5 1.00). The incentives
increased the time spent working by
31 percent (po.001, standardized
effect size 5 1.13); however, again
feedback had no effect (p 5 1.00).
Although speculative, the results
imply that feedback per se, absent
evaluation, is unlikely to increase
performance even when correlatedwith performance-contingent rewards.

53
PERFORMANCE IMPROVEMENT QUARTERLY, 20(3–4) PP. 53–74& 2008 International Society for Performance Improvement
Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/piq.20003

the effects of linear, accelerating, and decelerating piece-rate pay on
performance.
Consistent with the general literature, Bucklin and Dickinson (2001)
reported that monetary incentives improved performance in comparison
to hourly pay in each thematic line of research. However, performancewas comparable across variations in the incentive percentage, theschedule of delivery, and the amount of the per-piece incentive. Hantula(2001) arrived at similar conclusions in his review of the effects ofschedules of reinforcement on organizational behavior. Moreover, his
review included studies that examined both monetary and nonmonetary
performance consequences. The conclusions of these authors derived
from the results of both laboratory studies and ﬁeld studies conducted in avariety of settings, although the types of tasks were restricted, for the mostpart, to rate-oriented tasks over which the performer had a great deal ofcontrol (such as trapping beavers, planting trees, passing tests on the basisof instructional units, doing auto repair). Reviewing the studies, Bucklin
and Dickinson noted that frequent performance feedback was available toparticipants in most of the studies, leading them to propose that the
feedback might have been the reason performance did not differ
according to the incentive percentage, incentive amount, or schedule ofdelivery.
Studies Examining Individual Monetary Incentives and Performance
Feedback
A number of studies have demonstrated that simultaneous implementation of monetary incentives and feedback improves performance.
For example, a study by Shikdar and Das (2003) showed signiﬁcantproductivity differences for a ﬁsh-trimming task in a large ﬁsh processing
plant owing to monetary incentives and feedback. Improvements wereabout 40 percent and 58 percent for the two experimental groups
receiving monetary incentives and feedback compared to a control group
receiving no incentives or feedback. Similarly, LaMere, Dickinson, Henry,
Henry, and Poling (1996) conducted a study that examined theperformance of truck drivers. Following implementation of a monetary
incentive and feedback package, performance increased signiﬁcantly andwas maintained during the four-year follow-up.
There have also been a number of studies demonstrating howmonetary incentives improved performance when feedback systems werealready in place. For example, Gaetani, Hoxeng, and Austin (1985)
improved the performance of two machinists when they added monetary
incentives to feedback. They used a within-subject ABAC design, in which
A 5 hourly pay, B 5 hourly pay with feedback, and C 5 commission
compensation with feedback. When the participants self-monitored theirown performance in the B condition (hourly pay with feedback), theirperformance level approximately doubled. Performance declined when
feedback was removed in the second hourly pay condition. When themonetary incentives with feedback were then implemented, performance
54

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Performance Improvement Quarterlyincreased once again and was considerably higher than performance
during the hourly pay with feedback condition.
Dierks and McNally (1987) reported similar results with proof
operators at a bank. They measured the number of checks processed inan hour by each proof operator. Initially, the employees processed anaverage of 1,065 items per hour. After implementing a weekly feedback
graph, the performance level of the proof operators rose sharply to 2,100
items per hour. Management then added a monetary incentive system,and performance rose even further, until the employees were processing
an average of 3,500 items per hour.
Although studies have documented that monetary and nonmonetarytangible rewards often enhance the effectiveness of feedback, few studies
have examined whether feedback enhances the effectiveAlthough studies haveness of monetary and nonmonetary rewards. Additionally,
documented that moneas is discussed later, the results of those studies have beentary and nonmonetary
inconclusive. In addition to being practically important,tangible rewards often
the question of whether feedback enhances the effectiveenhance the effectiveness of monetary and nonmonetary tangible rewards isconceptually interesting because performance-contingent
ness of feedback, few
rewards are themselves a form of performance feedback.
studies have examined
Yet a number of authors have discussed why feedback
whether feedback
may indeed enhance the effectiveness of behavioral
enhances the effectiveconsequences (Balcazar, Hopkins, & Suarez, 1985–86;
ness of monetary andBucklin, McGee, & Dickinson, 2003; Duncan & Bruwelnonmonetary rewards.
heide, 1985–86; Prue & Fairbank, 1981; Kang, Oah, &Dickinson, 2003).
Why Performance Feedback May Enhance the Effectiveness of
Incentives
One possibility is that feedback may function as a discriminative
stimulus (SD). Balcazar and coauthors (1985–86) suggested that feedback
might initially function as an SD because of generalization from a person’s
reinforcement history. That is, historically rewards may have been offered
when feedback was present but not when it was absent. Therefore when
feedback is presented along with already existing behavioral consequences, it may evoke a higher level of performance. The higher level of
performance may then be maintained by additional consequences, which,in the case of monetary incentives, would be the additional money earned
in incentives.
Another possible explanation is that feedback may function as aconditioned reinforcer because of a history of feedback being delivered at
the same time as other reinforcers (Bucklin et al., 2003; Duncan &Bruwelheide, 1985–86). Additionally, in many situations feedback isprovided more frequently and more immediately than performancecontingent rewards and incentives are. Thus feedback may improve
performance because it is more immediate and frequent than the rewards
themselves, even though linked to those rewards.
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55

Some authors have noted that the manner in which feedback
is typically delivered violates the deﬁnitions of discriminative stimuli
and conditioned reinforcers (Agnew & Redmon, 1992; Malott,
1992; Peterson, 1982). Namely, even though performance feedback isoften more frequent and immediate than organizational rewards
and incentives, the temporal delays are still too great for feedback toeffectively function as either an SD or a conditioned reinforcer. Instead,these authors have suggested the effects of feedback can best be explainedin terms of rule control, that is, verbal descriptions of the relevant
contingencies rather than direct exposure to the actual contingencies.
Such rules, however, are more effective if feedback is associated withsome valued consequence. Thus all of these analyses suggest that feedback
is more effective when it is correlated with performance-contingent
consequences such as monetary incentives. It is also the case thatverbal descriptions about receipt of delayed rewards may inﬂuence
behavior more if frequent, immediate feedback is provided because
the feedback may repeatedly prompt employees to state rules such as‘‘I have earned ﬁve dollars in incentives. If I produce more, I will earn evenmore money.’’
Studies Examining Whether Feedback Enhances Incentivized
Performance
The results of studies that have examined whether feedback enhances
the effectiveness of incentives have not been conclusive. In a careful
reanalysis of the Hawthorne studies, Parsons (1974) maintained that theperformance improvements seen in the ﬁrst Relay Assembly Test Roomexperiment were due to performance feedback and a contingent ﬁnancial
reward system. He compared the results of that study to the results of asecond study conducted in the same setting. The second resembled theﬁrst, except that performance feedback was not present. Similar to theﬁrst experiment, the production rate in the second experiment rose
immediately when the new pay system was introduced. Unlike the ﬁrst
experiment, the production rate in the second experiment did notcontinue to rise during the eight-week period of time that the new pay
system was in effect. These data suggest that feedback may have enhanced
the effectiveness of the monetary incentives.
Smoot and Duncan (1997) investigated the effects of individual
monetary incentives with and without feedback in a laboratory simulation.
Monetary incentives and feedback were initially provided to participants
for constructing parts made from pop beads. Feedback was then removed,
and performance actually increased. This unusual result was probably
because during the feedback condition participants tallied the number ofparts they produced as they assembled them. This procedure reduced thetime available for making the parts, which is a serious confound given thatthe sessions were only 15 minutes.
Bucklin et al. (2003) also tried to isolate the effect of feedback on
individual monetary incentives. They employed a within-subject ABAC
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Performance Improvement Quarterlydesign, in which A 5 monetary incentives, B 5 monetary incentives withfeedback, and C 5 hourly pay with feedback. They used a computerized
work simulation task called Synwork, which was designed to assess
complex performance demands relevant to many work settings (Elsmore,1994). Synwork presented participants with four work tasks simultaneously, involving arithmetic, memory, visual monitoring, and auditory
monitoring. Participants earned points for correct responses. The
performance of six of the seven participants increased when feedback
was added to the monetary incentives. Although feedback improved
performance, the performance of the participants did not reverse after the
feedback was removed in the second A condition, thus limiting theconclusions that could be drawn. To demonstrate thatthe improvements were not due to other variables,
Ultimately, no studies
given the within-subject reversal design, performance
have clearly documenwould have had to return to the level seen in the ﬁrst A
ted the effect that perphase.
formance feedback has
It is possible, as suggested by Bucklin et al. (2003),
on a monetary incentivethat the feedback resulted in a higher level ofsystem.
performance that was then maintained by the additional incentives. It is also possible that self-produced feedback or
environmental changes initiated by the feedback procedure could not be
removed. For example, participants reported anecdotally that the feedback
made them more aware of the amount of time they spent performing thetask, their overall speed of responding, and the amount of time they
allocated to the various subtasks, which affected how many points theyearned. If true, a within-subject reversal design is not an appropriate
experimental design to use.
Rationale and Purpose of the Current Study
Ultimately, no studies have clearly documented the effect that
performance feedback has on a monetary incentive system. In fact, an
extensive literature search did not produce any study that examined how
performance feedback inﬂuenced the effectiveness of any type of
behavioral consequence. Nonetheless, this is an important research area.
Foremost, if performance feedback does improve the gains made bymonetary incentives, this means that feedback should be added to existing
monetary incentive systems. Most organizations do not provide feedback
to their employees even though they pay incentives (Buyniski, 1995).
Another implication is that this may help explain the nondifferential
responding obtained across variations in performance-pay systems,
speciﬁcally across variations in the percentage of total and base pay
earned in incentive pay, the schedule of incentive delivery, and theamount of the per-piece incentive (Bucklin & Dickinson, 2001). That is, if
feedback does enhance the effectiveness of monetary incentives, it would
lend support to Bucklin and Dickinson’s suggestion that feedback might
have been responsible for maintaining performance under these variations
in performance-pay systems.
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57

Deﬁnitions of feedback vary widely, as do procedures (Alvero, Bucklin,& Austin, 2001; Ilgen, Fisher, & Taylor, 1979; Prue & Fairbank, 1981).
These differences obscure the effects of objective feedback per se. In theircomprehensive review of the effects of feedback on organizational
behavior, Ilgen and colleagues (1979) stated: ‘‘The diverse elements
subsumed under the single rubric of feedback may share the property of
conveying some degree of information about past behavior, but they sharelittle else. As a result, many factors often are confounded with the
feedback stimulus, which makes it difﬁcult, if not impossible, to ascertain
the effects of feedback per se’’ (p. 349).
For the purposes of our study, we deﬁned feedback simply as objective
information about past performance. Our goal was to determine whether
such feedback would enhance performance as individuals receive
monetary incentives because the feedback was correlated with valued
rewards (that is, the incentives). Though such feedback is typicallyaccompanied by praise, prompts, or criticism from supervisors and peers
in work settings and these events themselves are often reasonably referred
to as feedback, they could increase performance. This would confound theeffects of the objective performance feedback, as noted by Ilgen andcoauthors. Thus in this initial investigation, we restricted our feedback
procedure to objective information about past performance.
In the current study, we used frequent immediate feedback for two
reasons. First, frequent feedback was used in the two studies in which theresults, though inconclusive, support the hypothesis that feedback may
enhance the effectiveness of monetary incentives (Bucklin et al., 2003;
Parsons, 1974). Second, Kang and colleagues (2003), in a laboratory study,
compared the effectiveness of relatively immediate and delayed feedback
when participants were paid individual monetary incentives and foundthat the more immediate feedback signiﬁcantly increased performance.
This was the only study we could locate that compared the relative effects
of feedback immediacy when individuals were paid incentives.
The current study controlled for two potential confounds that might
have eliminated performance differences under the incentive and feedback conditions: the lack of attractive alternative activities and thepresence of the experimenter (Bucklin et al., 2003; Matthews & Dickinson,
2000; Mawhinney, 1975). In relatively short experimental sessions, if
individuals are not given attractive alternatives they might work at a
maximum rate, regardless of the presence or absence of feedback andincentives, simply because there is nothing else to do. This differs from atypical work setting where a variety of alternative activities often compete
effectively with work. In the current study, seven computer games served
as alternative tasks.
In a simulated laboratory setting, it is not possible to duplicate thevariety of attractive off-task activities that exist in the workplace. Computer
games, however, have been used as alternative tasks in prior incentive
studies and shown to result in off-task behavior (Bucklin et al., 2003;
Matthews & Dickinson, 2000). Additionally, computer games have58

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Performance Improvement Quarterlyecological validity; workers have access to computer games at theirworkstations and do play computer games as an alternative to working(Betts, 1995; Eng & Schwartz, 1993; Klett, 1994). The time spent performing
the experimental task was recorded to determine whether any changes in
performance were due to this factor. To ensure that the computer games
were attractive activities for participants, participants were selected on thebasis of their interest in playing the speciﬁc games used in the study.
In work settings, supervisors often punish nonproductive behavior
and reinforce productive behaviors. Thus workers may be moreproductive when the supervisor is present. It is possible that the presenceof an experimenter would affect behavior similarly, unrealistically inﬂating
performance and eliminating performance differences that might otherwise occur. To control for this potential confound, the experimenter was
not present during experimental sessions.
It was important to select a work task for which feedback would be
useful. We used a rate-oriented task in which hundreds of work units are
typically produced so that performers could not monitor their own
progress accurately. Otherwise, participants could have self-generated
their own feedback, making it impossible to withhold. The nature of thetask (a data entry task that simulates the job of a proof operator at a bank),
however, may limit generality.
Because this study was a laboratory simulation, questions arise withrespect to generality. Opsahl and Dunnette (1966), in their classic paper‘‘The Role of Financial Compensation in Industrial Motivation,’’ appealed
to researchers to conduct laboratory studies so that the effects of ﬁnancial
incentives could be isolated from administrative changes that accompany
them in the work place. Concerns that the results of the study will notgeneralize to actual work settings, however, are legitimate, and caution
should be exerted in discussing the relevance of the results. Nonetheless,researchers who have compared laboratory and ﬁeld studies thatinvestigated feedback and incentives report the results to be similar(Hantula, 2001; Jenkins, 1986; Jenkins et al., 1998; Locke, 1986). In the
introduction of a collection of studies that examined the generality oflaboratory studies, Locke (1986) stated: ‘‘Both college students andemployees appear to respond similarly to goals, feedback, incentives,
participation, and so forth, perhaps because the similarities among thesesubjects (such as in values) are more crucial than their differences. Task
differences do not seem to be overwhelmingly important’’ (p. 6).

MethodParticipantsParticipants were 123 male and female college students. To be
included, participants must have indicated on a questionnaire that they
played one of the seven computer games that served as the off-task
activities at least one hour a month. They also were required to pass a shortVolume 20, Number 3–4 / 2008

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59

quiz about the pay system (either ﬁxed or incentive pay, depending on thecondition to which they were assigned) to ensure they understood it.
Setting and Apparatus
The experimental setting consisted of a small laboratory room with an
adjustable chair, computer, keyboard, mouse, and gel palm rest. The
experimental task was a check-prooﬁng task, similar to the job of a proof
operator at a bank. A computer program displayed a graphic of a checkwith randomly generated dollar amounts between $10.00 and $999.99.
The participant entered the amount using the keypad and pressed Enterto summon up another check. The computer had seven computer games
available for play at all times.
Dependent Variables
The main dependent measure was the average number of checks
completed correctly per session. Secondary dependent variables were (1)the number of minutes spent performing the work task, (2) the number ofcorrectly completed checks per minute while working (speed), and (3) thepercentage of correctly completed checks (accuracy). The computer
automatically recorded the number of checks completed, the number
completed correctly, and the minutes spent performing the task. Speed inworking and the percentage of checks completed correctly were calculated
from the data collected by the computer.
Independent Variables
The independent variables were the pay system (individual incentive
pay versus ﬁxed pay) and feedback (the presence or absence of feedback).
There were four conditions: (1) individual incentives without feedback, (2)individual incentives with in-session feedback, (3) ﬁxed pay without
feedback, and (4) ﬁxed pay with in-session feedback. To control for thefact that participants in the two incentive groups and the ﬁxed-pay-within-session-feedback group knew that their performance was being
monitored (otherwise, incentives and feedback could not be delivered),participants in all groups were told that the experimenter would tell them
how many checks they completed correctly during each session after the
study was over. This information was not considered to be ‘‘feedback,’’
however, because the participants did not have the opportunity to engage
in the task again, and hence the information about performance could not
inﬂuence their performance. All participants were paid in cash at the endof the study, rather than during. The reason for the delayed payment wasthat the amount of the incentive pay could serve as an effective form of
feedback for participants in the monetary-incentive-without-feedback
condition, thus introducing a confound.
Individual Monetary Incentives Without Feedback. Participantsreceived $.006 per check completed correctly.
Individual Monetary Incentives With In-Session Feedback. Participantsreceived $.006 per check completed correctly and in-session feedback.
The feedback consisted of an on-screen display indicating the total
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Performance Improvement Quarterlynumber of checks completed correctly throughout the session and theaverage number of checks completed correctly per minute. The rate was
updated every 30 s.
Fixed Pay Without Feedback. Participants were paid $5.75 per session
regardless of performance.
Fixed Pay With In-Session Feedback. Participants were paid $5.75 persession, regardless of performance, and received in-session feedback. The
feedback was the same as the feedback just described for individual
monetary incentive with in-session feedback.
Experimental Design and Statistical Analyses
A two-by-two factorial design was used with participants randomly
assigned to one of the four groups. There were 30 participants in thegroup with ﬁxed pay with in-session feedback and 31 participants in eachof the other three conditions. Two-factor ANCOVAs were used to analyze
the number of checks completed correctly, the time spent performing theexperimental task, and the speed of check completion. The number ofchecks completed correctly during a pretest session was used as thecovariate, to control for initial keyboard proﬁciency. A two-factor
ANOVA was used to analyze the percentage of checks completed
correctly. An ANOVA was used rather than an ANCOVA because thecovariate was not signiﬁcantly correlated with this variable. Because
multiple dependent variables were examined, to control for the familyerror rate p values were adjusted using the correlation corrected
Bonferroni method (Huitema, 1980, 2006; Tamhane, 1996).
Experimental Procedures
Participants attended an introductory session, one 45-minute pretest
session during which keyboard proﬁciency was assessed, and six 45-minuteexperimental sessions. Six experimental sessions, rather than one, wereconducted so that the participants contacted the experimental contingencies
repeatedly, increasing conﬁdence that effects were due to the independent

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FIGURE 1.
Experimental
Design andProcedures.

61variables rather than to social demands of the experimental setting. Figure 1
displays the experimental design and procedures.
Introductory Session. The experimenter explained the task andrelevant pay procedures to participants and then administered the pay
quiz. Participants who passed the quiz practiced the task and computer
games. The experimenter then paid them $5.75 for attending the session.
Pretest Session. The pretest session was used to obtain the covariate
for the ANCOVA analyses. During this session, participants were paid
$5.75 for performing the experimental task. The number of checks
completed correctly was used as a covariate to control for differences inkeyboard proﬁciency. Although a more accurate assessment would
probably have been obtained if we had paid participants a per-checkincentive, previous research has shown that participants who receive ﬁxed
pay often perform much lower after they have been paid incentives thanotherwise. Thus we did not want to expose participants assigned to thetwo ﬁxed-pay groups to incentives prior to the six experimental sessions.
Experimental Sessions. Each participant attended six 45-minuteexperimental sessions, three per week. Before each session, theexperimenter reminded participants how they would be paid and also
told them they could take breaks whenever they liked for as long as they
liked. Participants were also told they could play the computer games orjust stretch and relax during breaks. The experimenter then left the room,
returning to end the session 45 minutes later.
After participants completed their last session, the experimenter told
them how many checks they completed correctly each session and how
many total checks they completed correctly during the study. He thenpaid them in cash.

Results
Number of Checks Completed Correctly
Table 1 displays the means and standard deviations for the number ofchecks completed correctly, Table 2 displays the adjusted means based on
the ANCOVA, and Table 3 displays the ANCOVA source table withadjusted p values. The incentives signiﬁcantly increased performance
relative to ﬁxed pay (F 5 39.46, adjusted p 5 0.00, standardized effectsize 5 .91); however, feedback did not affect performance (F 5 0.05,
adjusted p 5 1.00, standardized effect size 5 .04).
Cost per Check
Cost is an important consideration when ascertaining the value of theperformance differences between the incentive and ﬁxed pay. Participantsin the incentive conditions were paid $0.006 per check; those in the ﬁxed
pay conditions received $5.75 per session. Participants in the ﬁxed-pay
groups completed an average of 553.9 checks per session (see Table 1);thus the average cost per check was $0.01. This represents a 67 percent
62

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Performance Improvement QuarterlyTABLE 1
RAW MEANS FOR THE NUMBER OF CORRECTLY COMPLETED CHECKS
Feedback Variable
In-Session Feedback
Pay system
Incentive
Fixed
Overall

Mean
815.1
560.4
687.7

No Feedback

SD
187.8
256.1
256.6

Mean
743.1
547.5
645.3

Overall

SD
182.6
220.2
223.6

Mean
779.1
553.9

SD
187.3
236.6

TABLE 2
ADJUSTED MEANS FOR THE NUMBER OF CORRECTLY COMPLETED CHECKS
Feedback Variable

Pay system
Incentive
Fixed
Overall

In-Session
Feedback

No Feedback

Overall

Mean
772.6
567.4
670.0

Mean
754.8
571.4
663.1

Mean
763.7
569.4

TABLE 3
ANCOVA SOURCE TABLE FOR THE NUMBER OF CORRECTLY COMPLETED CHECKS
Source

df

SS

MS

F

p

padj

Feedback variable (A)Pay system (B)
AB
Error
Total

1
1
1
118
122

1420
11437293642
34197461420
1143729
3642
28981

0.05
39.46
0.13

0.82
0.00
0.72

1.00
0.00
1.00

increase in the cost per check. Extrapolating, if participants in the ﬁxedpay groups had completed the same average number of checks as those in
the incentive pay groups (779.1; see Table 1), the labor costs associatedwith their performance would have been $7.79 per session ($0.01  779.1),
in contrast to $4.67 per session for those in the incentive pay groups.
Minutes Spent Performing the Experimental Task
Table 4 displays the means and standard deviations for the number ofminutes spent performing the experimental task, Table 5 displays theVolume 20, Number 3–4 / 2008

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63

TABLE 4
RAW MEANS FOR THE MINUTES SPENT PERFORMING THE WORK TASK
Feedback Variable
In-Session Feedback
Pay system
Incentive
Fixed
Overall

Mean
42.1
32.0
37.0

No Feedback

SD
4.6
11.1
9.8

Mean
41.4
31.6
36.5

Overall

SD
5.0
10.6
9.6

Mean
41.7
31.8

SD
4.8
10.8

TABLE 5ADJUSTED MEANS FOR THE MINUTES SPENT PERFORMING THE WORK TASK
Feedback Variable

Pay system
Incentive
Fixed
Overall

In-Session
Feedback

No Feedback

Overall

Mean
41.44
32.05
36.74

Mean
41.53
31.98
36.75

Mean
41.48
32.01

TABLE 6ANCOVA SOURCE TABLE FOR THE MINUTES SPENT PERFORMING THE WORK TASK
Source

df

SS

MS

F

p

padj

Feedback variable (A)Pay system (B)
AB
Error
Total

1
1
1
118
122

0.00
2716.970.24
7950.610.00
2716.97
0.24
67.38

0.00
40.32
0.00

0.995
0.000
0.953

1.00
0.00
1.00

adjusted means, and Table 6 displays the ANCOVA source table withadjusted p values. This analysis also served as a manipulation check todetermine whether participants actually found the games to be attractive
off-task activities. Participants who received incentives spent signiﬁcantly
more time performing the task than did participants who received ﬁxedpay (F 5 40.32, adjusted p 5 0.00, standardized effect size 5 1.13);
however, feedback did not affect time on task (F 5 0.00, adjusted
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Performance Improvement Quarterlyp 5 1.00, standardized effect size 5 .00). These data also suggest that theparticipants found the computer games to be attractive alternative tasks.
Fixed-pay participants spent an average of 13.2 minutes, 29 percent of thetotal session time, engaged in off-task activities, while incentive
participants spent 3.3 minutes, 7 percent of the total session time.
Speed of Check Completion
Table 7 displays the means and standard deviations for the number ofchecks completed per minute when working, Table 8 displays the adjusted
means, and Table 9 displays the ANCOVA source table with adjusted pvalues. Neither incentives nor feedback signiﬁcantly affected speed of
TABLE 7
RAW MEANS FOR THE NUMBER OF CHECKS COMPLETED PER MINUTE
Feedback Variable
In-Session Feedback
Pay system
Incentive
Fixed
Overall

Mean
19.6
17.5
18.6

No Feedback

SD
3.6
3.7
3.8

Mean
18.2
17.2
17.7

Overall
SD
3.6
3.0
3.3

Mean
18.9
17.3

SD
3.6
3.3

TABLE 8ADJUSTED MEANS FOR THE NUMBER OF CHECKS COMPLETED PER MINUTE
Feedback Variable
In-Session
Feedback

No Feedback

Overall

Mean
18.74
17.63
18.19

Mean
18.41
17.69
18.05

Mean
18.58
17.66

Pay system
Incentive
Fixed
Overall

TABLE 9ANCOVA SOURCE TABLE FOR THE NUMBER OF CHECKS COMPLETED PER MINUTE
Source

df

SS

MS

F

p

padj

Feedback variable (A)Pay system (B)
AB
Error
Total

1
1
1
118
122

0.57
25.59
1.14
573.00

0.57
25.59
1.14
4.86

0.12
5.27
0.24

0.733
0.023
0.629

1.00
0.08
1.00

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65

TABLE 10
MEANS FOR THE PERCENTAGE OF CORRECTLY COMPLETED CHECKS
Feedback Variable
In-Session Feedback
Pay system
Incentive
Fixed
Overall

Mean
98.35
97.26
97.80

No Feedback

SD
1.01
3.21
2.41

Mean
98.51
97.98
98.25

Overall

SD
0.83
1.44
1.19

Mean
98.43
97.62

SD
0.92
2.48

TABLE 11
ANOVA SOURCE TABLE FOR THE PERCENTAGE OF CORRECTLY COMPLETED CHECKS
Source

df

SS

MS

F

p

padj

Feedback variable (A)Pay system (B)
AB
Error
Total

1
1
1
119
122

6.119
20.0432.394
412.407

6.119
20.043
2.394
3.466

1.77
5.78
0.69

0.186
0.018
0.408

0.69
0.06
1.00

performance when participants were working on the experimental task
(F 5 25.59, adjusted p 5 0.08, standardized effect size 5 .01 and F 5 0.12,
adjusted p 5 1.00, standardized effect size 5 .00, respectively).
Percentage of Checks Completed Correctly
Table 10 displays the means and standard deviations for thepercentage of checks completed correctly, and Table 11 displays the
ANOVA source table with adjusted p values. Accuracy was high, varying
by no more than 1.25 percent across the conditions. Given these data, it is
not surprising that neither incentives nor feedback signiﬁcantly affected
this variable (F 5 5.78, adjusted p 5 0.06, standardized effect size 5 .00
and F 5 1.77, adjusted p 5 0.69, standardized effect size 5 .01, respectively). These data may be primarily important because they indicate thatthe incentives did not decrease accuracy; this is probably due to incentives
being provided only for correctly completed checks.

Discussion
Although studies have shown that performance-contingent consequences augment the effectiveness of performance feedback, it has not yet
been determined whether the reverse is true; does feedback enhance theeffectiveness of performance-contingent rewards? The main purpose of66

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Performance Improvement Quarterlythis study was to determine whether feedback would elevate performance
when individuals were paid a monetary incentive. In the current study,
monetary incentives signiﬁcantly improved performance relative to ﬁxed
pay, demonstrating that the incentives were indeed rewards forparticipants; however, feedback did not enhance performance, regardlessof whether participants received ﬁxed or incentive pay.
One interpretation of the ﬁndings is that participants performed at a
maximum level when paid incentives and thus were unable to perform
any higher. Though possible, this interpretation is rendered not likely;
participants in the ﬁxed-pay-with-feedback condition did not performbetter than those receiving ﬁxed pay without feedback.
Balcazar et al. (1985–86) suggested that feedback might enhance
performance if individuals were already receiving incentives because
the feedback might prompt better performance thanks to pastexperiences, and then that performance might be maintained by theadditional incentives. Our results do not support this conceptualization.
On the other hand, it might be that our participants did not havea history in which feedback was correlated with rewards, or if they didthen the type of objective feedback we used might have been too
dissimilar to the type of feedback they received in the past for suchgeneralization to occur.
Others suggested that feedback might come to function as aconditioned reinforcer because of its correlation with the incentives,and might increase performance because the feedback is delivered more
immediately and frequently than the incentives themselves (Balcazar et al.,
1985–86; Bucklin et al., 2003; Duncan & Bruwelheide, 1985–86). Onceagain, our results do not support this suggestion; nor do they support theposition that frequent, immediate feedback as an antecedent stimulus
might cause individuals to state verbal rules to themselves (‘‘I havecorrectly completed 800 checks. If I complete more, I will earn moremoney in incentives’’), which then might increase performance. In thecurrent study, because participants were not paid until they had
completed all six sessions their performance was controlled not by themoney itself but by the promise of payment. Given the rate-based task
used in the study, the line of sight between the number of checks
completed correctly and the incentive pay might have been so clear(Lawler, 2000) that the objective feedback was not necessary. Conceptually, it may be that performance was controlled by a rather simple verbal
description of the relationship between performance and the incentives(‘‘The more checks I complete, the more money I will earn’’), which madethe feedback superﬂuous. Additionally, the verbal description might havebeen evoked by aspects of the situation (such as the daily instructions by
the experimenters, the laboratory setting itself, and so on) rather than the
feedback. If true, then feedback would not be expected to enhance
performance as either a conditioned reinforcer or an antecedent stimulus;
rather, the feedback would remain a completely neutral stimulus. This
analysis is highly tentative. Covert verbal descriptions of contingencies
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67

cannot be directly observed; nor have attempts been made to measurethem in incentive studies.
Although we can only speculate about the reasons feedback failed toelevate performance, we believe it is likely that the results were due to thetype of feedback used. Because the investigation was designed to examine
whether performance feedback per se would increase incentivized
performance, we restricted feedback to objective information about task
performance. No evaluative statements were given to participants about
their performance. As indicated earlier, this was done because theevaluative statements (praise and criticism) might have acted as rewards
for participants in and of themselves. Thus the results of the study could
not have been attributed solely to the feedback procedure. This analysis
has important implications for interpretation of the present results.
Objective performance feedback alone may be insufﬁcient to increase
performance even when wages are performance-contingent.
Studies examining objective performance feedback by itself are rare. A
close look at many previous studies reveals that performance feedback isoften accompanied by evaluative statements. That is, supervisors provide
praise or criticism based upon the feedback. For example, Brown and
Sulzer-Azaroff (1994) and Wilson, Boni, and Hogg (1997) described theirinterventions as feedback alone, and the interventions were classiﬁed assuch in a subsequent review (Alvero et al., 2001). However, in both studies
the managers who delivered the feedback also gave praise for improved
performance.
In actual work organizations, it is extremely difﬁcult to determine
whether a feedback intervention is in fact a feedback-alone intervention.
This is especially the case when supervisors provide the feedback, as in theﬁeld studies just mentioned. Employees have a history in which theirsupervisors have evaluated their performance. Given that such anevaluation has in the past been correlated with contingent consequences(at least to some degree), even though the performance reward
contingency for the newly targeted performance may not be explicitly
explained or stated, the supervisory feedback may ‘‘act much like a moreformal change in an employees’ job description or contract. The overall
impact is ‘to notify’ employees of the new or now to be enforced
contingencies operating in the organization’’ (Prue & Fairbank, 1981, p.
12). This notiﬁcation, of course, implies evaluation. Thus despite the factthat the authors of many ﬁeld studies and later reviewers have labeledinterventions as feedback-alone interventions, other controlling variables
remain quite plausible.
Four studies lend credibility to our supposition that feedback alone is
not sufﬁcient to improve performance, although unlike ours none
explicitly linked feedback to performance-contingent rewards. Two wereapplied studies; two were laboratory studies. The former (Brown, Willis, &Reid, 1981; Crowell, Anderson, Abel, & Sergio, 1988) directly comparedfeedback alone with feedback plus approval or praise. Brown andcolleagues found that feedback alone resulted in no lasting increase in
68

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Performance Improvement Quarterlyperformance. However, when approval was later added to the feedback,performance increased greatly and was maintained over time. Crowell andcoauthors instituted a feedback-alone condition, in which managers gave
numerical scores to employees without evaluation. Treatment integrity
measures were taken to ensure that feedback was delivered without
evaluation. Although performance increased slightly, it did not reach theminimal desired level during the feedback condition. However, whensocial praise was added, performance exceeded the desired level,
suggesting that praise was necessary for signiﬁcant performance
improvement.
In one of the two laboratory studies, Chapanis (1964) attempted toisolate the ‘‘purely motivational effect of knowledge of performance fromits informational and rewarding aspects’’ (p. 263). College students, whowere paid hourly, punched digits into a Teletype tape one hour a day for
24 days. To increase the realism of the task, they were told that they were
programming a computer. The research assistant deliberately acted as
though she did not care how well they performed. In two of threefeedback groups, participants could see a counter that tallied every stroke.
In the third group, participants wrote down their output three times
during the session. None of the feedback groups performed better than agroup that did not receive feedback.
In the laboratory study by Das (1982), college students drilled holes insteel connector plates using a drill press. Sessions lasted one hour. One
group received feedback on the number of holes they drilled. An electriccounter provided this feedback during the session. Another group
received feedback along with the percentage of good holes punchedevery ﬁfteen minutes. Neither group performed better than a control
group that did not receive any feedback. However, a group that received
both types of feedback along with a production standard performed
signiﬁcantly better than the control group. Further, two groups thatreceived production standards (‘‘normal’’ or ‘‘hard’’) without feedback did
not perform better than the control group. Thus only the group thatreceived feedback and performance standards performed signiﬁcantly
better than the control group that received neither.
When performance standards are present, they imply that theperformance of individuals will be evaluated against this standard. Thus
Das’s results (1982) are consistent with the contention that feedback is noteffective unless some type of evaluation is implied or explicitly given. It isalso not surprising that feedback with goal setting (that enables evaluationof performance) has generally been found to improve performance morethan either alone (Fellner & Sulzer-Azaroff, 1984; Ilgen et al., 1979).
Others have also argued that an evaluative component is necessary for
feedback to affect performance (Ilgen et al., 1979; Kopelman, 1986; Prue &Fairbank, 1981). In keeping with this analysis, most current deﬁnitions of
performance feedback (as opposed to the deﬁnition ‘‘knowledge ofresults’’) imply some type of evaluative or comparative component, as
did the cybernetic and systems theoretical roots of the term (Duncan &Volume 20, Number 3–4 / 2008

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69

Bruwelheide, 1985–86). For example, Rummler and Brache (1995) deﬁned
feedback as ‘‘information that tells performers what and how well they are
doing’’ (p. 66; italics added). Similarly, in their review of feedback studies
Ilgen and coauthors stated, ‘‘Thus, we conclude that feedback is
information about appropriateness of past performance’’ (p. 351; italics
added). Our study demonstrates that performance feedback without anevaluative component may not affect performance, even if explicitly
correlated with performance contingent rewards.
We used computer-generated objective performance feedback, whichmight also have inﬂuenced the results. The source of the feedback may
affect how objective feedback affects performance (Alvero et al., 2001;
Balcazar et al. 1985–86; Ilgen et al., 1979; Prue & Fairbank, 1981).
Supervisors, for example, typically have control over an array of valued
rewards for employees. This, combined with the long-term nature of theirrelationship with the employee (as well as their personal relationship),
could well increase the effectiveness of objective performance feedback(Balcazar et al.; Ilgen et al.; Prue & Fairbank). To date, however, this issue
remains largely unresolved. Nonetheless, the results of the two appliedstudies discussed earlier (Brown et al., 1981; Crowell et al., 1988) suggestthat objective performance feedback from supervisors has only a limited
effect on employee performance.
In addition to the type of feedback we used, the nature of the task
might have contributed to the results. In the present study, participants
were already proﬁcient (or at least relatively so) with data entry andkeyboarding tasks and therefore could readily identify correct performance. Thus the feedback might have been superﬂuous (Baumeister,
Hutton, & Cairns, 1990) or even distracting. If so, participants may nothave looked at or attended to the feedback. If that was the case, thepossibility remains that this type of feedback might be effective when
performers are less skilled on the task or when correct performance is not
so easily identiﬁed (Alavosius & Sulzer-Azaroff, 1990; Annett, 1969).
However, the properties of the task that inﬂuence the effectiveness of
feedback have not yet been determined.
Several limitations to the generality of the results are important tomention. First, the study was a laboratory simulation, which limits thedegree to which one can assume generality to actual work settings.
Nonetheless, as indicated earlier, in general the results of laboratory
and applied studies that examined monetary incentives and feedback
have been similar. Second, the manner in which feedback was provided
in this study is not representative of how feedback is often imparted inwork settings. Computer-delivered objective feedback was used in an
attempt to eliminate evaluation and better identify causal variables. In
most work settings a supervisor typically delivers feedback, and it is likelythat such feedback includes some degree of evaluation. Third, as noted
earlier, the task was a repetitive data entry task and performers werealready quite skilled on it. Different results may be obtained with othertypes of task.
70

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Performance Improvement Quarterly

Conclusions
Individual monetary incentives produced signiﬁcantly higher performance than ﬁxed pay, from both a statistical and a practical perspective.
The gains were because participants who received incentives spent moretime working, rather than working faster or more accurately. Perhaps asimportant, even though incentives increased performance they did notdecrease accuracy. However, the incentives were based on both rate andquality. If they had been based only on rate, then these results might wellhave been different. Our results extend the incentive literature because
few studies have documented how incentives increase performance.
Objective feedback alone did not affect performance, regardless ofwhether pay was performance-contingent or ﬁxed. The feedback in thecurrent study did not contain an evaluative component; it was restricted
to objective information about task performance. As we have noted, this is
not the type of feedback that commonly occurs in work settings, where
supervisors praise, prompt, or criticize employees in an attempt toinﬂuence their performance. We used the type of objective feedback we
did in the study because the study was designed to examine whether
objective feedback per se would increase incentivized performance
because it was correlated with the incentives, which were valued rewards.
However, this type of feedback did not inﬂuence performance in thecurrent study. The results of our study extend the feedback literature bysuggesting that even when objective performance feedback is explicitly
correlated with performance-contingent rewards, it is unlikely to beeffective. Rather, some type of evaluative component may be necessary for
feedback to enhance performance.

Acknowledgments
We are grateful to the ISPI Research Grant Committee for providing
the funds to conduct this study and offering us sufﬁcient funds to expand
the study from a two-group to a four-group study. We also want toacknowledge the helpful comments of the committee members on earlier
versions of the manuscript. The study was conducted as the master’s
thesis of Douglas A. Johnson.

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DOUGLAS A. JOHNSON
Douglas A. Johnson is a doctoral candidate at Western Michigan
University, where he teaches classes and conducts research on
performance improvement. He works as a freelance consultant, providing
services in performance management, computer-based training, instructional design, and website construction and maintenance. Mailingaddress: Department of Psychology, Western Michigan University,
Kalamazoo, MI 49008–5439. E-mail: djohnson@operant-tech.com

ALYCE M. DICKINSON
Alyce M. Dickinson, Ph.D., is a professor of psychology at WesternMichigan University and a Fellow of Division 25 of the American
Psychological Association. She directs the industrial-organizational
psychology graduate program at WMU. Mailing address: Department of
Psychology, Western Michigan University, Kalamazoo, MI 49008–5439.
E-mail: alyce.dickinson@wmich.edu

BRADLEY E. HUITEMA
Bradley E. Huitema, Ph.D., is a professor of psychology at WesternMichigan University who currently researches (1) development of new
statistical methods and (2) application of these methods to single-subject
research and scientiﬁc investigation of complementary and alternative
medicine. Mailing address: Department of Psychology, Western Michigan
University, Kalamazoo, MI 49008–5439. E-mail: brad.huitema@wmich.edu

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