Mission and the Bottom Line: Performance Incentives in a Multigoal Organization

We assess the role of monetary incentives in a mission-oriented organization by randomly assigning workers to one of two bonus schemes, incentivizing either the performance of a microcredit program (bottom line) or the empowerment of clients (mission). We find that the credit bonus improved credit-related outcomes but undermined the social mission, while the social bonus did not harm the bottom line. These results are consistent with a multitasking model with production spillovers or with prosocial behavior. We show that when mission-related rewards are not feasible, organizations that care about both the mission and the bottom line prefer flat wages to incentives.

Automated summary

This study assesses the role of monetary incentives in a mission-oriented organization and finds that while credit bonuses improve credit outcomes, they undermine the organization's social mission. On the other hand, social bonuses do not harm the organization's bottom line. The results suggest that when mission-related rewards are not feasible, organizations prefer flat wages over incentives.