Can Paying Employees to Quit Boost Motivation? Evidence from a Lab Experiment

We investigate whether pay-to-quit incentives can enhance worker productivity by conducting an online laboratory experiment with 1,000 participants. Subjects were randomly assigned to either a control condition, which offered no financial inducement to quit, or to a treatment condition in which they received a one-time offer of CHF 5 to exit the task. Our findings indicate that participants who reject the quit offer complete, on average, 33% more tasks than those in the control group. The evidence suggests that the foregone quit payment establishes a salient reference point, thereby inducing increased effort and a higher likelihood of surpassing performance thresholds. This study contributes to both behavioral decision research and the practice of personnel management by elucidating how a seemingly counterintuitive incentive can have dual effects: screening out less committed employees and motivating those who remain to invest greater effort.