Research / BFI Working PaperApr 16, 2021

Job Design, Learning & Intrinsic Motivation

According to psychologists and neuroscientists, a key source of intrinsic motivation is learning. An economic model of this is presented. Learning may make work less onerous, or the employee may value it in and of itself. Multitasking generates learning: performing one task increases productivity on related tasks. Intrinsic motivation generates a new multitask incentive problem if the rate of learning varies across tasks. With no incentive pay, employee autonomy complements learning because expected output increases as the employee uses his or her knowledge to enhance learning. The second part of the paper adds a simple incentive. Incentive pay does not “crowd out” intrinsic motivation, but it does rebalance effort away from learn-ing and towards output. Learning has complex interactions with performance measurement. A higher rate of learning tends to reduce performance measure distortion, especially for a very distorted measure. It also tends to reduce the potential for manipulation, as does multitasking. However, if job design is strongly imbalanced towards a few key tasks, or learning varies significantly across tasks, a higher rate of learning may increase the employee’s ability to manipulate the measure. In that case the firm might prefer an incentive with no autonomy, or autonomy with no incentive. 

More Research From These Scholars

BFI Working Paper Apr 1, 2016

Technology, Skill and the Wage Structure

Nancy Stokey
Topics:  Technology & Innovation, Fiscal Studies, Monetary Policy
BFI Working Paper Jun 4, 2018

Internet Rising, Prices Falling: Measuring Inflation in a World of E-Commerce

Austan Goolsbee, Pete Klenow
Topics:  Tax & Budget, Technology & Innovation
BFI Working Paper Mar 20, 2023

Sentiment, Productivity, and Economic Growth

George M. Constantinides, Maurizio Montone, Valerio Potì, Stella Spilioti
Topics:  Financial Markets