Do Incentives Matter? The Case of Navy Recruiters

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Abstract
This study examines how Navy recruiters in April–August 1986 responded to a multiperiod incentive plan that included piece rates, quotas, prizes, and standards. Recruiters generally produced more enlistments as they gained experience and as the date of their eligibility for a prize approached. Those with higher past output (who were thus more likely to win a prize), however, produced less as they approached the prize eligibility date. Recruiters also enlisted markedly fewer recruits immediately after winning a prize. This evidence that recruiters varied their effort over time in response to an incentive system, the author suggests, has implications for such private sector jobs as sales and tenure-track teaching.

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