Improving Workers’ Performance in Small Firms: A Randomized Experiment on Goal Setting in Ghana

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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.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages44
Volume2022-028
Publication statusPublished - 26 Oct 2022

Publication series

NameCentER Discussion Paper
Volume2022-028

Keywords

  • Behavioral Constraints
  • Goals setting
  • Management Practices
  • Small firms
  • Informal Businesses

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