To Find the Best Incentives for Employees, Start with a Simple A/B Test - Deepstash
To Find the Best Incentives for Employees, Start with a Simple A/B Test

To Find the Best Incentives for Employees, Start with a Simple A/B Test

Curated from: insight.kellogg.northwestern.edu

Ideas, facts & insights covering these topics:

4 ideas

·

457 reads

6

Explore the World's Best Ideas

Join today and uncover 100+ curated journeys from 50+ topics. Unlock access to our mobile app with extensive features.

Using A/B testing for employee incentives

Using A/B testing for employee incentives

Marketers use A/B tests to set different call-to-action messages against another or find which of two messages will cause the most sales on an e-commerce site.

Managers can also use A/B tests for other things, such as designing the best way to motivate employees. A single A/B test can provide a significant amount of information about how employees will respond to several incentive strategies.

16

272 reads

The right incentives

Organisations use a wide range of incentive schemes to motivate their employees: Some schemes are basic such as a base salary and a bonus if specific targets are reached. Other schemes are more complex. All involve critical decisions with critical trade-offs. 

One of the only ways for managers to know if there are better incentive schemes for their particular organisation is by altering the existing scheme for a limited time and see what happens to performance.

15

71 reads

The accuracy of the A/B test model

Researchers found that using previously published productivity data can predict how employees perform under another entirely different incentive scheme.

Researchers also used actual productivity data to test their model's ability to design a better contract. They found that using data from any two contracts could enable employers to create a third contract that reaches over two-thirds of the gains of an optimal contract.

14

62 reads

Benefits of A/B testing

The data from an A/B test to create an incentive scheme is close to optimal.

The A/B testing framework doesn't require the employer to understand in advance anything about their employees' preferences, such as a dislike for working at a faster pace. They also don't need to understand the effort that goes into being more productive. Employers only need to observe and react.

14

52 reads

IDEAS CURATED BY

charnichol

Publishing rights manager

Charles Nichols's ideas are part of this journey:

How To Become a Better Decision-Maker

Learn more about corporateculture with this collection

Understanding the importance of decision-making

Identifying biases that affect decision-making

Analyzing the potential outcomes of a decision

Related collections

Read & Learn

20x Faster

without
deepstash

with
deepstash

with

deepstash

Personalized microlearning

100+ Learning Journeys

Access to 200,000+ ideas

Access to the mobile app

Unlimited idea saving

Unlimited history

Unlimited listening to ideas

Downloading & offline access

Supercharge your mind with one idea per day

Enter your email and spend 1 minute every day to learn something new.

Email

I agree to receive email updates