Agenda

Elena Cettolin (Tilburg University) - Improving Workers’ Performance in Small Firms: A Randomized Experiment on Goal Setting in Ghana
(joint work with Patricio Dalton and Kym Cole)

Abstract:

Behavioral constraints like workers’ motivation and self-control problems can be a barrier to growth of small firms in LICs. In a field experiment, we test whether setting non-binding production goals improves workers’ performance in small cassava processing firms in Ghana. We first train workers to measure their daily production and then randomly assign a sub-sample to set daily production goals. Workers who set goals increase output by 16%, work 40 minutes longer per day and are 9% more productive per hour, increasing the average product of labor by 14%. The data suggests that goals act as a commitment device and ignite workers’ competitive spirit.