Nudging Supervisors to Vary the Timing of Financial Spot Bonuses

Last registered on June 29, 2021

Pre-Trial

Trial Information

General Information

Title
Nudging Supervisors to Vary the Timing of Financial Spot Bonuses
RCT ID
AEARCTR-0007891
Initial registration date
June 28, 2021
Last updated
June 29, 2021, 2:22 PM EDT

Locations

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Primary Investigator

Affiliation
University of Cologne

Other Primary Investigator(s)

PI Affiliation
Frankfurt School of Finance and Management
PI Affiliation
University of Cologne
PI Affiliation
University of Cologne

Additional Trial Information

Status
In development
Start date
2021-07-01
End date
2026-12-31
Secondary IDs
Abstract
In a multinational industrial company, we implement a nudge reminding supervisors that they can reward extraordinary performance with financial spot bonuses during the entire year, and not only at the end of the year. We investigate whether this nudge shifts the timing of financial spot bonuses in the second half of 2021. In particular, we are interested in whether nudged supervisors award more spot bonuses in the third quarter of 2021 compared to supervisors who have not been nudged.
External Link(s)

Registration Citation

Citation
Block, Sidney et al. 2021. "Nudging Supervisors to Vary the Timing of Financial Spot Bonuses." AEA RCT Registry. June 29. https://doi.org/10.1257/rct.7891-1.0
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2021-07-01
Intervention End Date
2021-12-31

Primary Outcomes

Primary Outcomes (end points)
Frequency of spot bonuses awarded in the third quarter.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Frequency of spot bonuses awarded in other quarters. Size of spot bonuses awarded.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Randomly selected supervisors with rights to award financial spot bonuses receive a reminder. The reminder provides information that, historically, the majority of spot bonuses have been paid out at the end of the year. Moreover, it encourages the supervisors to award spot bonuses also during the year. The reminder will be sent out by the company. Note that the intervention is solely aimed at the timing of rewards. It does not mention the number of bonuses or the size of bonuses, and it will not affect the budgets for bonuses that the company has in place. With the exception of the reminder, we leave the company’s current system of financial rewards untouched.

We will measure the treatment effect by drawing on spot bonus payout data.
Experimental Design Details
Not available
Randomization Method
Stratified cluster randomization. We cluster supervisors based on a combination of their location, function and business unit. We stratify clusters by geographic region, function, average team size and number of managers in the cluster. Randomization is done in STATA.
Randomization Unit
Groups of supervisors defined by the same combination of location, function and business unit.
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
701
Sample size: planned number of observations
Approx. 1,800 supervisors Approx. 12,000 employees Numbers as of April 2021. Turnover and restructuring may affect the final sample size.
Sample size (or number of clusters) by treatment arms
Treatment: 352 clusters
Control: 349 clusters
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
University of Cologne Ethics Board
IRB Approval Date
2021-04-08
IRB Approval Number
210006 DS