x

Please fill out this short user survey of only 3 questions in order to help us improve the site. We appreciate your feedback!
Performance Pay or Fixed Pay - A Field Experiment with a Large Retail-Chain
Last registered on September 21, 2017

Pre-Trial

Trial Information
General Information
Title
Performance Pay or Fixed Pay - A Field Experiment with a Large Retail-Chain
RCT ID
AEARCTR-0002450
Initial registration date
September 21, 2017
Last updated
September 21, 2017 12:56 PM EDT
Location(s)
Region
Primary Investigator
Affiliation
University of Cologne
Other Primary Investigator(s)
PI Affiliation
University of Applied Science Neuss
PI Affiliation
University of Cologne
Additional Trial Information
Status
On going
Start date
2017-08-01
End date
2018-06-30
Secondary IDs
Abstract
Within a large retail chain, we randomly assign store managers to either a performance-contingent bonus or a fixed bonus payment. The performance-contingent bonus is based on the store’s profit contribution margin (= sales - costs of goods sold - inventory shrinkage - personnel costs).
External Link(s)
Registration Citation
Citation
Manthei, Kathrin, Dirk Sliwa and Timo Vogelsang. 2017. "Performance Pay or Fixed Pay - A Field Experiment with a Large Retail-Chain." AEA RCT Registry. September 21. https://doi.org/10.1257/rct.2450-1.0.
Former Citation
Manthei, Kathrin et al. 2017. "Performance Pay or Fixed Pay - A Field Experiment with a Large Retail-Chain." AEA RCT Registry. September 21. http://www.socialscienceregistry.org/trials/2450/history/21663.
Experimental Details
Interventions
Intervention(s)
Intervention Start Date
2017-09-01
Intervention End Date
2017-11-30
Primary Outcomes
Primary Outcomes (end points)
The contribution margin on the store level (as well as all its components), further retail key figures
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
The intervention takes place in one of two regions in the North of Germany. This experiment follows an earlier experiment (registered under AEARCTR- 0002128). In the preceding experiment we had randomly assigned districts within each region to either TreatMONIT (1), TreatBON (2), TreatMONITBON (3), or the Control group (4).
Two months after the first round experiments, groups are switched so that every store manager is eligible for a bonus in exactly one three month period this year. We now use this switch to study a different question, namely to compare the effect of a performance based bonus with the effect of a fixed payment of similar magnitude.
We now randomly assign districts that previously belonged to the control group and the treatment group TreatMONIT to the two new treatments TreatFIX or TreatBON:

TreatBON: Store managers receive a three-month bonus for an increase of their contribution margin above 80% of its planned value (following from the accounting plan for each store). In each month, store managers receive a bonus value of 0.05 * (contribution margin in € - 80% of the plan value). Cumulative bonus values are paid out after three month (capped at zero). Store managers receive monthly feedback on their performance (the respective bonus values).

TreatFIX: Store managers receive a fixed pay of 280€ each month for a three month period. Store managers receive monthly feedback on their performance (values of the gross margin).

Control: The stores in districts belonging previously to TreatBON or TreatMONITBON do not receive any further sort of information.

We briefed the district managers how to react to different sorts of questions concerning the experimental design.
Experimental Design Details
Randomization Method
Stratification method
Randomization Unit
District
Was the treatment clustered?
Yes
Experiment Characteristics
Sample size: planned number of clusters
28 district
Sample size: planned number of observations
198 stores
Sample size (or number of clusters) by treatment arms
TreatBON: 52 stores
TreatFIX: 48 stores
Control: 95 stores

Note: There can be slight changes in the number of treated stores as previous experience has shown that the firm may reconfigure district compositions for administrative reasons at short notice. However, this should concern only very few stores and we document reasons and procedures.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
IRB Approval Date
IRB Approval Number
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is data collection complete?
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports, Papers & Other Materials
Relevant Paper(s)
REPORTS & OTHER MATERIALS