Work Motivation and Teams

What type of workers respond to team incentives and observation by peers? To ad-dress this question, we develop a novel technique to measure motivation for working on a task using deviations from the money-maximising benchmark in a real-effort experiment. Although we find that average output increases in response to team in-centives and observation, we also find that highly motivated workers do not respond. The reason is that highly motivated workers already work hard, and increasing ef-fort even further is very costly to them. Consequently, we provide a new measure for work motivation and we show that it shapes the effects of team incentives and observation by peers