Management Accounting Section Midyear Meeting

The Impact of Feedback Frequency and Performance-Contingent Bonuses on Learning and Performance

• In Event: Control Systems II

Abstract

This study investigates how the frequency of cognitive feedback interacts with bonus incentives in an environment with incomplete information. We experimentally examine how feedback influences performance when it is either provided evenly spaced throughout a task, or front-loaded at the beginning of the task, and whether the effect is moderated by the presence of a performance-contingent bonus. We predict and find that evenly spaced feedback produces higher performance when there is no bonus. However, when a bonus is offered, identical front-loaded feedback is more effective. Additional tests reveal that without a bonus, front-loaded feedback leads to cognitive overload, and consequently lowers performance. However, when a bonus is provided, workers take a more active approach to learning and spend more time trying to understand the feedback, which leads to higher performance. This study adds to the growing body of accounting studies on the effects of feedback frequency on performance. Importantly it highlights that performance-contingent incentives can influence the effectiveness of feedback.

Authors

• Jeremy Lill, University of Kansas

• Alice Muncy, Georgia State University