The Impacts of Employee Excellence Rewards on Workers and Firms: The Role of Managerial Discretion vs. Worker Empowerment

Last registered on January 09, 2025
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Pre-Trial

Trial Information

General Information

Title
The Impacts of Employee Excellence Rewards on Workers and Firms: The Role of Managerial Discretion vs. Worker Empowerment
RCT ID
AEARCTR-0014861
Initial registration date
November 21, 2024

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
December 02, 2024, 11:08 AM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
January 09, 2025, 11:25 AM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

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Primary Investigator

Name
Namrata Kala
Affiliation
MIT Sloan School of Management
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Other Primary Investigator(s)

PI Name
Madeline McKelway
PI Affiliation
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Additional Trial Information

Status
In development
Start date
2024-11-20
End date
2025-06-01
Keywords
Behavior, Firms & Productivity, Gender
Additional Keywords
productivity, firm culture, wages, workplace interventions, employee appreciation, employee excellence rewards
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
In this project, we will investigate the impact of workplace excellence rewards on workers’ productivity, attendance, earnings, and firm culture. It would be conducted in rural Uttar Pradesh, India in partnership with a large carpet producing firm, in 150 small firms that the partner firm sources from. The intervention will randomize whether and how bonuses for workplace excellence worth about 10% of the average worker wage are allocated. We would randomize, at the firm-level, whether bonuses for carpet workers are allocated (a) based on managerial discretion or (b) worker voting. We will use data on productivity, attendance, earnings, and perceptions about firm culture to understand whether and how different systems of rewarding workers can improve outcomes for workers and firms.
External Link(s)

Registration Citation

Citation
Kala, Namrata and Madeline McKelway. 2025. "The Impacts of Employee Excellence Rewards on Workers and Firms: The Role of Managerial Discretion vs. Worker Empowerment." AEA RCT Registry. January 09. https://doi.org/10.1257/rct.14861-2.0
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Experimental Details

Interventions

Intervention(s)
Our partner firm sources carpet orders from many small firms, each with around 5-50 carpet weavers (the workers) and one manager. The intervention we study will be a clustered randomized control trial, with 150 small firms. We will randomize whether a firm gets a workplace excellence reward program or not (the control group will also get rewards, but allocated at random). The recipient of the reward would either be decided by the manager, or via worker voting (the allocation mechanism would be randomly chosen). There will be one bonus for every 5 workers. Every two weeks, the recipients will be announced, and the reward will be given out in a small ceremony. The intervention will continue for 3 months. The random allocation (for the control group) would be done through a public lottery to ensure workers knew the allocation was truly random.
Intervention Start Date
2024-12-10
Intervention End Date
2025-03-04

Primary Outcomes

Primary Outcomes (end points)
1) Worker productivity (measured as knots woven, adjusted for carpet complexity)
2) Worker attendance
3) Worker earnings


We will also record the workers who came in second place in each treatment arm. In the control arm, all workers not randomly selected for the reward will be considered second place. This will allow us to estimate the impact of winning a bonus on workers' outcomes (described above), and also how that impact differs based on how the bonus was allocated.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Defect rates for carpets produced for our implementation partner.

We will also create indices for the following outcomes and analyze each of the outcomes separately:
1. Perceptions about Firm Culture and Management
2. Perceptions about Firm Culture and Co-Workers
3. Reciprocity towards managers
4. Reciprocity towards workers
5. Preferences over bonus allocation
6. Mental well-being and perceived agency

Using the managerial survey, we will analyze the following outcomes:
Perceived competitiveness
Perceived collaborativeness
Preference over bonus allocation
Perceived reciprocity
Social connections to workers
Managerial presence in the workplace


We will also record the workers who came in second place in each treatment arm. In the control arm, all workers not randomly selected for the reward will be considered second place. This will allow us to estimate the impact of winning a bonus on workers' outcomes (described above), and also how that impact differs based on how the bonus was allocated on secondary outcomes. Furthermore, we will test whether the type of winner is different in different treatments.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We would randomize each of 150 loom centers to one of the following treatments (each arm will have 50 loom centers):
1. The manager chooses which worker the bonus is paid to (managerial discretion treatment).
2. Workers choose via voting which worker the bonus is paid to (worker empowerment treatment).
3. The bonus is allocated at random (control group).
Bonuses will be given fortnightly for three months, and will be roughly equal to 10% of workers’ average monthly wages.

We will use pairwise stratification to maximize power. Specifically, we will form groups of three firms, matched on gender and average worker attendance at baseline, and randomize within these groups. Firms may attrit, leaving their strata without observations from each treatment group for many outcomes. In such cases, we will pool the incomplete strata with the strata of the same gender that has the closest baseline attendance level when estimating treatment effects.

Outcomes will be measured both during and after the three months of bonuses.

We will estimate two main specifications: one that pools both treatments and compares them to the control, and one that estimates effects of the two treatment arms separately. We will use baseline controls and LASSO to improve precision.
We will test for heterogeneity along the following baseline dimensions: gender (these are single-gender workplaces for the most part), perceptions about workplace culture related to managerial practices, and perceptions about workplace culture related to dynamics among the workers.

We will also record the workers who came in second place in each treatment arm. In the control arm, all workers not randomly selected for the reward will be considered second place. This will allow us to estimate the impact of winning a bonus on workers' outcomes (described above), and also how that impact differs based on how the bonus was allocated.
Experimental Design Details
Not available
Randomization Method
Stratified randomization done on a computer
Randomization Unit
Firm
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
150
Sample size: planned number of observations
2250 workers, 150 managers
Sample size (or number of clusters) by treatment arms
50 firms in each cluster
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Dartmouth College
IRB Approval Date
2024-11-13
IRB Approval Number
STUDY00033137
Analysis Plan