Payoffs and Compensation
As manager, you will receive a fixed salary of $10.00 for completing your task. This means that you will receive $16.00 guaranteed in total (including your participation fee) for completing the study.
Your primary task is to complete the performance evaluations {{ if player.condition == 3 or player.condition == 4}}and bonus allocations {{ endif }} for employees in your assigned group at the end of each period.
As mentioned previously, employees’ total compensation for the study will include their participation fee of {{ if player.condition == 1 or player.condition == 2 }}$6.00{{else}}$3.00{{ endif }} plus additional compensation based on the total points earned from one randomly selected period of the four they will complete.
This compensation will include the following:
| 1. | 1 point per work unit accurately completed by them for their own benefit. |
| 2. | 1 point per work unit accurately completed for their benefit by other employees. As previously mentioned, the sum of (1) and (2) is equal to the employee's total output for the period. (In addition, if an employee chooses to spend time completing work that increases another employee’s total output, the other employee will receive 1 point per work unit accurately completed during this time). |
| 3. | Any points allocated to them by you from the group’s discretionary bonus pool of 300 points. |
Examples
For illustrative purposes, consider the examples presented to you earlier:
1. Suppose in a particular period, a participant:
| - | Completed 75 work units in part 1. |
| - | Spent 0.5 minutes (30 seconds) in part 2 completing work to increase their own total output and completed 10 work units in this time. |
| - | Spent 1.5 minutes (90 seconds) in part 2 completing work to increase another employee’s total output and completed 30 work units in this time. |
Suppose also that another employee spent time working to increase the participant’s total output in part 2 of the period and completed 20 work units in that time. The participant’s total output for the period would be 105, as illustrated in the feedback below that the participant would receive at the end of the period:
| Part 1 - Units completed (1) |
Part 2 – Units completed toward the participant's own total output (2) |
Part 2 – Units completed toward another employee’s total output (3) |
Units completed toward the participant's output by other employee(s) (4) |
Participant's total output (1) + (2) + (4) |
| 75 | 10 | 30 (This increased the other employee's output by 30 units) |
20 | 105 |
The group’s manager would see the following information for the participant (note that the manager would see the same information for the other employees in the group as well):
| Employee | Employee total output | {{ if player.condition == 2 or player.condition == 4 }}Spent time working to increase the total output of another employee | Had another employee (or other employees) spend time working to increase their total output on their behalf | {{ endif }}
| A | 105 | {{ if player.condition == 2 or player.condition == 4 }}Yes | Yes | {{ endif }}
Recall that each employee can spend time completing work that increases the total output of another employee. However, you and the other managers will not learn which employees spent time working to increase another employee’s total output, or which employees had others spend time working to increase their total output on their behalf.
{{ endif }}In addition, suppose the group’s manager rates the participant’s performance at 75 (1-100){{ if player.condition == 3 or player.condition == 4 }} and chooses to allocate 75 points from the company’s discretionary bonus pool to the participant{{ endif }}.
If this period was randomly selected for compensation, the participant’s total compensation would be:
| {{ if player.condition == 1 or player.condition == 2 }} {{ endif }}Points earned from total output (105 × 1): {{ if player.condition == 1 or player.condition == 2 }}{{ endif }} | 105 | |
| Points allocated to participant by manager from the bonus pool: | 50 | |
| Total points | {{ if player.condition == 1 or player.condition == 2 }}105{{ else }}180{{ endif }} | |
| Compensation earned: ({{ if player.condition == 1 or player.condition == 2 }}105 {{ else }}180 {{ endif }}points / 25 points per $1.00 = ) | {{ if player.condition == 1 or player.condition == 2 }}$4.20{{ else }}$7.20{{ endif }} plus participation fee |
2. Suppose in a particular period, a participant:
| - | Completed 80 work units in part 1. |
| - | Spent 2 minutes (120 seconds) in part 2 completing work to increase their own total output and completed 50 work units in this time. |
Suppose also that no other employee spent time working to increase the participant’s total output in part 2 of the period. The participant’s total output for the period would be 130, as illustrated in the feedback below that the participant would receive at the end of the period:
| Part 1 - Units completed (1) |
Part 2 – Units completed toward the participant's own total output (2) |
Part 2 – Units completed toward another employee’s total output (3) |
Units completed toward the participant's output by other employee(s) (4) |
Participant's total output (1) + (2) + (4) |
80 |
50 |
0 |
0 |
130 |
The group’s manager would see the following information for the participant (note that the manager would see the same information for the other employees in the group as well):
| Employee | Employee total output | {{ if player.condition == 2 or player.condition == 4 }}Spent time working to increase the total output of another employee | Had another employee (or other employees) spend time working to increase their total output on their behalf | {{ endif }}
| A | 130 | {{ if player.condition == 2 or player.condition == 4 }}No | No | {{ endif }}
Recall that each employee can spend time completing work that increases the total output of another employee. However, managers will not learn which employees spent time working to increase another employee’s total output, or which employees had others spend time working to increase their total output on their behalf.
{{ endif }}In addition, suppose the group’s manager rates the participant’s performance at 75 (1-100){{ if player.condition == 3 or player.condition == 4 }} and chooses to allocate 75 points from the company’s discretionary bonus pool to the participant{{ endif }}.
If this period was randomly selected for compensation, the participant’s total compensation would be:
| {{ if player.condition == 1 or player.condition == 2 }} {{ endif }}Points earned from total output (130 × 1): {{ if player.condition == 1 or player.condition == 2 }}{{ endif }} | 130 | |
| Points allocated to participant by manager from the bonus pool: | 50 | |
| Total points | {{ if player.condition == 1 or player.condition == 2 }}130{{ else }}205{{ endif }} | |
| Compensation earned: ({{ if player.condition == 1 or player.condition == 2 }}130 {{ else }}205 {{ endif }}points / 25 points per $1.00 = ) | {{ if player.condition == 1 or player.condition == 2 }}$5.20{{ else }}$8.20{{ endif }} plus participation fee |
Thus, your primary task is to complete performance evaluations on a scale of 1-100 {{ if player.condition == 3 or player.condition == 4 }}and allocate the discretionary bonus pool of 300 points {{ endif }}for each employee in your assigned group each period.
You will receive the following information for each employee in each period.
| Employee | Employee total output | {{ if player.condition == 2 or player.condition == 4 }}Spent time working to increase the total output of another employee | Had another employee (or other employees) spend time working to increase their total output on their behalf | {{ endif }}
| A | Work units completed by each employee themselves plus any work units completed for the employee’s benefit by other employees. | {{ if player.condition == 2 or player.condition == 4 }}Yes | No | {{ endif }}
| B | {{ if player.condition == 2 or player.condition == 4 }}Yes | Yes | {{ endif }}|
| C | {{ if player.condition == 2 or player.condition == 4 }}No | Yes | {{ endif }}|
| D | {{ if player.condition == 2 or player.condition == 4 }}No | No | {{ endif }}