Financial Incentives and the “Performance of Crowds” – Mason & Watts
Social scientists have long been interested in how incentives influence performance. Financial incentives interestingly are not perhaps the most efficient of motivators for crowds. This study found that increased financial incentives increase the quantity, but crucially not the quality of work. Those who are paid more perceive the value of their work to be higher but do not appear to be more motivated than those who are paid less.
Some services cannot rely on intrinsic or social rewards as motivation as these can be extremely context specific that is why many services prefer to use financial rewards. Economic research, such as Lazear, has found that performance-based pay schemes can be powerful in eliciting improved performance, increasing performance as much as 20% for workers in an auto glass factory.
The study uses Amazon’s Mechanical Turk as a tool to test financials incentives and performance. As stated above the key findings support traditional economic theory that by paying more will increase quantity, rather than quality and by adopting a performance-based pay scheme then quality will increase. All workers were found to be similarly motivated no matter how much they were paid, rather only their quantity increased, often at the detriment of quality (unless under performance-based pay conditions).
Relevance to Be Seated?
Our idea is a crowd-based service so user incentives is a key component of our service. One key finding is that financial rewards are not indicative of quality or necessarily significant quality as the following quote reveals;
“When it is possible to use non-financial rewards, such as harnessing intrinsic motivation, the quality of the work will be as good or better than using financial rewards, and therefore work can be accomplished as effectively for little to no cost. Second, when it is not possible to incentivize work through intrinsic motivation (i.e., enjoyable tasks) or through social rewards, it may be in the employer’s best interest to offer as little as possible— assuming, of course, a large enough crowd exists to make up for the diminished quantity of individual output the low pay would garner. Offering greater reward, in other words, may get the work done faster, but not better.”
It is therefore reassuring to know that intrinsic motivation in our service can be relied upon. Services like TripAdvisor rely on these motivations and offering financial rewards would not be conducive to better results.
Reference: Mason, W. and Watts, D. (2010). Financial incentives and the “performance of crowds”. ACM SIGKDD Explorations Newsletter, 11(2), p.100.
