Performance Feedback with Team Incentive: A Field Experiment in Chinese Factories

Abstract

ABSTRACT This paper employs a field experiment to investigate in which information environment team-based incentives work better. The experiment was conducted in two spinning factories in Henan, China. We focus on workers who were doing the same individualistic task but still were paid according to team performances. For about three months, we have given three different types of performance feedback, baseline, intra-team, and inter-team feedbacks. We find that workers’ productivity was highest with the intra-team feedback and lowest with the baseline feedback, which suggests that peer pressure and group status concern are of importance in making team incentives work.