Fostering Productive Interactions: Incentives, Processes, and Randomly Paired Employees

Abstract: In a firm-based field experiment, we randomly assigned over 650 agents to 4 different managerial treatments alongside an off-site hold-out group. The treatments include a $100 team incentive, structured face to face interactions, both the team incentive and structured interaction, and two control groups (one internal and one external). We find productivity gains of 14% with team incentives, 25% with structured interactions, and 27% with both. These estimates are similar when contrasted with the internal or external control group and in levels and differences with a pre-period. We find the performance gains are persistent for the structured interactions and fade out for the team incentives---underscoring the importance of management led processes, rather than incentives alone, to capture the benefits of peer interactions. The productivity gains for agents that received team incentives and structured interactions are submodular, suggesting these practices may have redundancies or crowd each other out. We also find evidence in support of these treatments inducing knowledge transfer and increased sales effort, albeit, in different proportions.