Economic theory has long suggested theuse of monetary incentives to motivate workers. In practice,however, public bureaucracies and nonprofit organizationsare driven by a broader mission that often involves multipleoperational goals, not all of which may translate equallywell into measurable indicators. The authors worked with thelargest partner of a prominent development organization inPakistan called the Pakistan Poverty Alleviation Fund (PPAF)and its largest partner National Rural Support Program(NRSP) who share the same mission of reducing poverty. Thestudy was conducted in all thirty five branch officeslocated in fifteen districts across Sindh, Punjab, andKhyber Pakhtunkhwa provinces, where NRSP was active. Theseresults indicate that both production and costcomplementarities are empirically relevant. Finally, theresults suggest that financial incentives that crowd outintrinsic motivation can also affect performance byundermining the willingness of motivated employees to workin teams.
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