The Effects Of Tangible Rewards Versus Cash Rewards In Consecutive Sales Tournaments: A Field Experiment

Keywords

Performance.; Repeated tournaments; Tangible rewards

Abstract

We investigate the effects of tangible versus cash rewards in a repeated tournament setting. Firms frequently use tangible rewards to motivate employees, but minimal research has examined their effects relative to cash rewards. We conducted a field experiment at a rug wholesaler that held two consecutive sales tournaments for its retailers. The top three retailers in each tournament received either cash rewards or tangible rewards (gift cards) to be distributed to sales staff. We do not find significant effects of reward type in the first tournament. However, in the second tournament, retailers eligible for tangible rewards significantly outperformed those eligible for cash rewards, and this effect is driven by Tournament One losers. Our results are consistent with the theory that Tournament One losers competing for tangible rewards increased sales effort in the second tournament significantly more than their counterparts competing for cash rewards. Our results have practical and theoretical implications.

Publication Date

11-1-2017

Publication Title

Accounting Review

Volume

92

Issue

6

Number of Pages

165-185

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.2308/accr-51709

Socpus ID

85036591502 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/85036591502

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