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

Abstract

We report the results of a cost-effective intervention to improve workers' performance in small cassava processing firms in Ghana. We train workers to track their daily output and then randomly assign a sub-sample to set daily production goals. Achieving or missing a goal does not carry monetary consequences. Goal setting increases workers' output by 16%, their productivity by 8% and the average product of labor in firms by 13%. Goal setting is particularly effective for piece-rate workers, increasing their output by 32% and productivity by 24%. While not conclusive, evidence suggests that goals serve as a self-regulation device.