The timing of payment

We aim at exploring the effects of the timing of payment on employees’ task performance in an employer-employee relationship and its mechanisms. The main mechanisms we focus on are: (1) reciprocity from being trusted regarding the early timing of payment before completion of (some or all) tasks; (2) feelings for being rewarded regarding the later timing of payment after completing (some or all tasks); (3) the role of the natural pattern of effort decay over time; (4) the role of positive emotions invoked by reciprocity and the reduction of negative emotion attributes to the award.

Intervention
We conduct slider-task real-effort lab experiment at Nankai University in Tianjin, China. Participants are students who signed up to the experiment through the experimental recruitment system at Nankai University.
Participants in each session are randomly allocated to the roles of one employer and many employees. After the random determination of the employer, the identity of the employer is announced to all the participants. Then the employer is taken to a separate room to perform the employers’ tasks. The employees stay at the original room to perform employees’ tasks.
The main intervention is to pay the employees their fixed amount (50 yuan) form task payment at different timing without pre-announcement. The additional intervention is to boost the employees’ positive emotion at different timing by letting the employees watch a short comedy video.
• The employer’s tasks in the treatment groups are:
- At the beginning of the session, read the priming material on the screen, choose the timing that they would like to pay the employees.
- Prepare the cash payment of 50 yuan and the receipt to pay and give to the employees.
- At the time that they chose to pay the employees, going back to the employees’ room, pay the 50 yuan cash payment, wait for the employees to sign the receipt, and collect the receipt.
- View the employees’ instantaneous performance during the experiment.
(In the baseline group, the employer is not provided with information and doesn’t choose the timing of payment. The timing of payment is by the end of the employees’ task as the social norm.)
• The employee’s tasks are:
- Using the mouse (only mouse) to move the point on the slider to the middle on the computer screen.
(each page contains 18 sliders and there are as many number of pages as the employees can perform; during the tasks, the employees are only given the instantaneous information of their completed numbers of sliders of the current page.)
- No cell phone or other entertainment is allowed during the experiment.
- The employees are not allowed to communicate with each other during the experiment.
• The employers’ payment:
- 5 yuan show up fee
- 45 yuan participation fee if stayed through the whole experiment
- Task income = numbers of sliders that all employees successfully completed in the formal task phase * 0.1 – the payment that the employer pays to all the employees.
(If the result of calculation is negative, the principal actually receives zero yuan. Both the employer and the employees are informed the equation and this information.)
• The employees’ payment:
- 5 yuan show up fee
- 0.1 yuan/ slider in the last two minutes of the practice phase
- 50 yuan fixed payment for the formal task phase.
- amount of money chosen in the incentivized questionnaire part if randomly selected by the computer.
• During the tasks of the experiment, we take pictures of the employee’s faces at the key timing point and at end of every page of sliders they complete (or at 4 minutes and 8 minutes of each part of the formal task phase if they do not perform any slider tasks) to analyse their instantaneous emotions. No pictures are taken during the break times.
• Employees also receive questionnaires about their instantaneous emotions at key timing points during the experiment.
• Employees receive questionnaires on the demographic questions, a distribution of money question and 5 mini-dictator game questions on their social preferences, multiple price list questions on timing preferences by the end of the experiment.

2024-04-02

2024-04-19

Research questions
• Research question #1: Does the timing of payment affect agents’ task performance?
o Hypotheses 1: Middle payment generates the highest performance as it invoke reciprocity from trust behaviour and prevent the decay of effort at the decaying time.
o Hypotheses 2: Begin payment generate higher payment than the end payment as it invoke the reciprocity from the trust behaviour.
o Hypotheses 3: Middle payment perform better than begin payment as it invoke the reciprocity from the trust behaviour and prevent the effort decay.

• Research question #2: What are the emotional mechanisms during this process?
o Hypotheses 1: The early payment (begin ore middle) invokes positive emotions of reciprocity.
 We look at these positive emotions: happiness, satisfaction, gratitude.
o Hypotheses 2: The middle payment invokes decreasing negative emotions that generated from the tiredness and boredom that causes the effort decay.
 We look at these positive emotions: boredom, tiredness.
o Hypotheses 3: The emotional mechanism for reciprocity are positive emotions rather than negative emotions like guilty or stressful
 We look at these negative emotions: guilty, stressful.
o Hypotheses 4: The pure emotional treatment will not perform as good as the emotion generated from the payment.
 This will be done by the between-subject analyses of the emotion treatments and the payment treatments.

• Research question #3: Reciprocity decays over time.
o Hypotheses 1: Participation of the end group for the voluntary work is higher than both begin and middle payment groups.
 This is measured by a 3 minutes voluntary work of the agent.

• Research question #4: Heterogeneous treatment effects.
o Hypotheses 1: Time preference doesn’t affect the results.
o Hypotheses 2: Social preference may exhibit heterogeneous treatment effects.
Estimation methodology
• Unit(s) of analysis
- We perform between-subjects analysis. Analysis will be at the individual level.
• Major outcome variable: agents task performance
- Overall
- Two Parts of the Formal Task Phase
- Minute-level performance overtime
• Major independent variables: treatment group
• Secondary independent variables: emotion variables
• Control variables: demographic variables, familiarity with the principal, mood and tiredness before coming to the experiment, Big 5 personality
• Heterogeneous treatment effect variables: time preference and social preference.

• Major independent variables: treatment effect
• Secondary independent variables: emotion variables
• Control variables: demographic variables, familiarity with the principal, mood and tiredness before coming to the experiment, Big 5 personality
• Heterogeneous treatment effect variables: time preference and social preference

Lab experiment. Real-effort slider task.

Experimental Design
Subjects are randomly allocated into 5 treatments and 10 sessions. Each treatment contains 2 sessions and around 54 participants (around 27 participants per session). The 5 treatments are:
- Baseline_payment_end: the baseline group, in which the employees receive their formal task payment in the 3 minutes break time by the end of the formal task phase.
- Treatment_payment_begin: the employees receiver their formal task payment in the 3 minutes break time before the formal task phase starts.
- Treatment_payment_middle: the employees receiver their formal task payment in the 3 minutes break time right in the middle of the two parts of the formal task phase.
- Treatment_emotion_begin: the employees receive their formal task payment in the 3 minutes break time by the end of the formal task phase, the employees watch a 3 minutes muted comedy video of Charlie Chaplin’s movie on their own screen in the 3 minutes break time before the formal task phase starts.
- Treatment_emotion_middle: the employees receive their formal task payment in the 3 minutes break time by the end of the formal task phase, the employees watch a 3 minutes muted comedy video of Charlie Chaplin’s movie on their own screen in the 3 minutes break time right in the middle of the two parts of the formal task phase.

Each session lasts for about 1 hour.
• The employer’s experimental procedure (an example of Treatment_payment_begin and Treatment_payment_middle):
- At the beginning of the experiment, read the (priming) material on the screen.
- Chooses the timing to pay the employees.
- Prepare the payment and receipt to be given to the employees.
- Go to the employee’s room, pay the employees, collect the receipt and return to own room.
- View the employees instantaneous task performance on the screen.

• The employee’s experimental procedure after the employer chooses the timing of payment:
Phase I. Practice Phase (3 minutes)
- 1 minutes no-pay practice
- 2 minutes paid practice (0.1 yuan/completed slider)
Break_Begin: 3 minutes break
Phase II. Formal Task Phase
- Part I: 12 minutes
Break_Middle: 3 minutes break
- Part II: 12 minutes
Break_End: 3 minutes break
Phase III. Questionnaires Phase
Phase IV. 3 minutes Voluntary Overtime Phase
(in this phase, the employee can decide whether to stay for additional 3 minutes tasks, there is no payment to the employees for this phase, but the employer receive 0.1 yuan/completed slider as in the formal task.)

Randomization
1. Students who signed up for the experiment are randomly allocated to each experimental session by our research assistant.
2. Before each experimental session begins, students randomly pick a card from a deck of folded cards on which show their seat number. The participant with Seat Number 1 takes the role of the employer, while the rest of the participants take the role of employees.
3. By the end of each experimental session, the random selection of the participants to be paid and incentivized question in questionnaire part is done by the computer.

experimental sessions

Yes

11 sessions (1 pilot session and 10 experimental sessions)

26 for the pilot session, about 270 for formal experimental sessions

5 treatments, 54 participants for each treatment