What if the way we pay our players is wrong?
Performance-related pay has become commonplace in football, with players typically incentivised to perform through individual or team-based targets.
Football Association rules decree that all clubs must have their bonus schemes in place before the season commences. But how effective is the current system? Does it really affect on the field behaviour?
We turn to a group of schoolchildren for some inspiration…
Economist Steven Levitt and colleagues decided to see if they could get students to do better in tests by giving them cash rewards for improving on previous scores.
Perhaps unsurprisingly, students who were incentivised with money tended to make bigger improvements than those with no monetary incentive. Importantly, however, the incentive was more powerful when it was framed as a loss.
The authors compared two groups of students: those who were given money after the test only if they met their performance standard (much like the model in football today), and those who were given money before the test and had it taken away if they failed to meet the performance standard. The second group tended to make more significant improvements than the first; fuelled by the fear of losing their money, these students tried harder than those attempting to win the cash. The pain from a potential loss outweighed the pleasure from a potential gain.
Is it possible that footballers could react in the same way? If players were paid their full salary – fixed and bonuses – but then had money deducted for not achieving, would it change their behaviour?
Picture a team that is 2-0 down after 60 minutes. Under normal performance incentives, the players may have already resigned themselves to missing out on a bonus. Consciously or subconsciously their commitment may fade in the knowledge that they will be no worse off after the game (at least in financial terms). Indeed we know that teams – when 2-0 down in games – only come back to secure a result 7% of the time. Under the ‘schoolchildren’ performance incentive, might the players work harder to avoid defeat given the prospect of a painful ‘fine’ coming their way?
The timing of the payout may also be important, as the authors of the schoolchildren study also highlight. A bonus paid out at the end of the season may feel more like a reward than an incentive; a retrospective gift to recognise hard work, rather than a target that could potentially drive behaviour during the season. Recognising performance achievements during the season could encourage players to deliver even more when it counts.
The practicality of changing the current performance-pay system in football would need careful thought, as it is vital that the players clearly understand and respect the club’s policy on bonuses. However, it is always useful to challenge the status quo and – in this case – question the way we currently pay:
What would happen if players were penalised for underachieving, rather than being rewarded for achieving?