I'm Working Hard, But It's Hardly Working : The Consequences of Motivating Employee Effort that Fails to Achieve Performance Targets

Managers often encourage employee effort by incentivizing employees to achieve performance targets. For some work tasks, such as those that involve quality standards or creativity, greater effort does not, or is not perceived as, resulting in increased employee performance outcomes. This paper examines the effect of employee effort on counterproductive work behaviors when those employees fail to meet specified performance targets. We conduct an experiment in which participants receive a bonus for meeting a challenging performance target in a real-effort task. We find that for individuals who fail to meet the performance target, greater effort is correlated with both an increased propensity towards non-compliant behavior and an increase in misreporting. Our results identify potential drawbacks of incentivizing employee effort when that effort may not translate into greater performance outcomes