Communicating performance targets to employees

Last registered on June 29, 2022

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Pre-Trial

Trial Information

General Information

Title

Communicating performance targets to employees

RCT ID

AEARCTR-0009627

Initial registration date

June 29, 2022

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

June 29, 2022, 3:30 PM EDT

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

Locations

Country

United States of America

Region

Primary Investigator

Name

Francisco de Asis Martinez Jerez

Affiliation

The Hotel School, Cornell SC Johnson College of Business, Cornell University

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Other Primary Investigator(s)

PI Name

Pablo Casas-Arce

PI Affiliation

Arizona State University

Contact Investigator

PI Name

Paulina Endara

PI Affiliation

The Hotel School, Cornell SC Johnson College of Business, Cornell University

Contact Investigator

Additional Trial Information

Status

In development

Start date

2022-07-01

End date

2023-05-01

Keywords

Behavior, Firms & Productivity

Additional Keywords

JEL code(s)

J33; M52; M54; M55

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

Performance targets indexed to indicators of economic activities have the advantage of adapting to the changing winds of the economy. However, they impose uncertainty on the economic agents that may result in lower effort. With our RCT we want to analyze whether sales team members exert more effort when they have a tangible target expressed as an absolute number of units to be sold versus a target expressed as percentage of an activity indicator? Further, how the effort exerted varies as a function of the ex-ante uncertainty in the economic activity? How different are the ex-ante number of units sold targets from the ex-post target number calculated as a function of the activity indicator?

External Link(s)

Registration Citation

Citation

Casas-Arce, Pablo, Paulina Endara and Francisco de Asis Martinez Jerez. 2022. "Communicating performance targets to employees." AEA RCT Registry. June 29. https://doi.org/10.1257/rct.9627-1.0

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Experimental Details

Interventions

Intervention(s)

We will set the performance target for a group of units relative to an indicator of activity (percentage of the addressable market) and for another group as an absolute number of transactions.

Intervention Start Date

2022-07-01

Intervention End Date

2022-10-01

Primary Outcomes

Primary Outcomes (end points)

Number of customers enrolled in the loyalty program and percentage of potential customers enrolled in the loyalty program.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

We will assign units to each of the experimental groups randomizing the assignment using a four dimensional blocking. The four dimensions of the blocking are class tier of the property (luxury, full-service, economy), past performance, location (airport or non-airport), and union status (unionized or not).
The performance periods will be three consecutive months (July, August, and September).
We will test our hypotheses by analyzing enrollment performance in absolute terms and as a function of the activity indicator.
We will use diff-in-diffs as the main econometric technique.

Experimental Design Details

Randomization Method

We performed the randomization using Stata.
We first created the blocks according to the four relevant dimensions (class tier, past performance, location, and union status) and then used the command stratarand.

Randomization Unit

A hotel

Was the treatment clustered?

Yes

Experiment Characteristics

Sample size: planned number of clusters

145 hotels

Sample size: planned number of observations

12 months of each of the 145 hotels. Possibly 12 months of approximately 900 employees.

Sample size (or number of clusters) by treatment arms

50 hotels with absolute target and 95 hotels with target relative to activity indicator.
If the unit of analysis is the hotel, the treatment will not be clustered. Then these numbers will refer to the sample size.
If the unit of analysis is the employee, the treatment will be clustered by hotel, and these numbers will refer to number of clusters.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Supporting Documents and Materials

IRB