Public-Private Differences with incentive structures: A laboratory experiment of work motivation and performance

Does the publicness of a work setting affect worker’s effort? The public/private distinction is one of representative topics with long history in public management. The clearest criteria to separate the public/private distinction is the monetary value. Money is important for both sectors, but people believe the public sector should consider more than money, such as social values and public interests.

This study is designed to examine the difference in work motivation between public and private setting as money. We expect that money can bring a different types of motivation, but not many research has provided empirical evidences on this, since motivation is abstract and complex. Motivation can be shown in results, but results should include effects of many other factors more than just motivation. The other way of measuring motivation is self-reporting scales, but this also can have common problem of the survey, common source bias.

Therefore, this study uses the lab experiment to measure the motivation. The experiment uses a simple task that anybody can normally do if they pay enough attention. For the public/private setting, we use recruiting and incentive structures of the experiment. The private setting uses monetary compensation for recruiting subjects, and monetary incentive to encourage subjects’ task performance. The public setting uses non-monetary compensation and non-monetary incentive for recruiting and encouraging subjects. We use the monetary/non-monetary setting to represent the private/public sector. We compare monetary/non-monetary recruiting, and we test whether incentive is effective on each setting.