Ian Larkin

Assistant Professor of Business Administration (Leave of Absence)

Ian Larkin is an assistant professor of business administration in the Negotiation, Organizations, and Markets Unit.

Ian researches the impact of formal and informal extrinsic rewards on employee decisions and firm performance, using real-world data from corporations and data generated from experiments. He is currently working on a major research project that examines how the incentives of pharmaceutical sales representatives affect physician prescribing behavior. Ian’s research has been published in the Journal of Labor Economics, Strategic Management Journal, American Economic Journal: Microeconomics and Academy of Management Papers and Proceedings, and has been cited by media outlets such as The Wall Street Journal, The New York Times, and National Public Radio.

Ian received his Ph.D. from the Haas School of Business at the University of California, Berkeley. He completed an M.Sc. in Development Economics from the University of London, where he was a British Marshall Scholar. As part of his undergraduate work at the University of Arizona, Ian spent over three years living in China, Japan, and Taiwan, and he speaks conversational Mandarin Chinese and Japanese. As a junior, he was awarded a Harry S. Truman Scholarship, given to students who commit to a career in public service. Before entering his Ph.D. program, Ian spent four years as an associate and engagement manager in the Hong Kong and Silicon Valley offices of McKinsey & Company, advising senior executives on corporate strategy in the banking and high technology industries. He serves on the Selection Committee for the British Marshall Scholarship and previously played the same role for the Harry S. Truman and Flinn scholarships.

Journal Articles

  1. The Cost of High-Powered Incentives: Employee Gaming in Enterprise Software Sales

    This paper investigates the pricing distortions that arise from the use of a common non-linear incentive scheme at a leading enterprise software vendor. The empirical results demonstrate that salespeople are adept at gaming the timing of deal closure to take advantage of the vendor's accelerating commission scheme. Specifically, salespeople agree to significantly lower pricing in quarters where they have a financial incentive to close a deal, resulting in mispricing that costs the vendor 6-8% of revenue. Robustness checks demonstrate that price discrimination by the vendor does not explain the identified effects.

    Keywords: incentives; motivation; compensation; gaming; sales force management; Motivation and Incentives; Salesforce Management; Software; Compensation and Benefits; Information Technology Industry;

    Citation:

    Larkin, Ian. "The Cost of High-Powered Incentives: Employee Gaming in Enterprise Software Sales." Journal of Labor Economics (forthcoming).
  2. Reining In a Rising Star

    Citation:

    Larkin, Ian. "Reining In a Rising Star." Negotiation 15, no. 7 (July 2012).
  3. Incentive Schemes, Sorting and Behavioral Biases of Employees: Experimental Evidence

    We investigate how the convexity of a firm's incentives interacts with worker overconfidence to affect sorting decisions and performance. We demonstrate experimentally that overconfident employees are more likely to sort into a non-linear incentive scheme over a linear one, even though this reduces pay for many subjects and despite the presence of clear feedback. Additionally, the linear scheme attracts demotivated, underconfident workers who perform below their ability. Our findings suggest that firms may design incentive schemes that adapt to the behavioral biases of employees to "sort in" ("sort away") attractive (unattractive) employees; such schemes may also reduce a firm's wage bill.

    Keywords: Motivation and Incentives; Performance; Behavior; Prejudice and Bias; Decisions; Employees; Wages;

    Citation:

    Larkin, Ian, and Stephen Leider. "Incentive Schemes, Sorting and Behavioral Biases of Employees: Experimental Evidence." American Economic Journal: Microeconomics 4, no. 2 (May 2012).
  4. The Psychological Costs of Pay-for-Performance: Implications for the Strategic Compensation of Employees

    Keywords: Cost; Compensation and Benefits; Motivation and Incentives; Strategy; Employees;

    Citation:

    Larkin, Ian, L. Pierce, and F. Gino. "The Psychological Costs of Pay-for-Performance: Implications for the Strategic Compensation of Employees." Strategic Management Journal 33, no. 10 (October, 2012): 1194–1214.
  5. The Danger of 'Take it or Leave it'

    Citation:

    Larkin, Ian. "The Danger of 'Take it or Leave it'." Negotiation 13, no. 1 (January 2010).
  6. Dear Negotiation Coach: Should You Get the Kinks Out?

    Keywords: Negotiation;

    Citation:

    Larkin, Ian. "Dear Negotiation Coach: Should You Get the Kinks Out?" Negotiation 11, no. 7 (July 2008).
  7. Bargains-then-ripoffs: Innovation, Pricing and Lock-in in Enterprise Software

    Keywords: Innovation and Invention; Software; Information Technology;

    Citation:

    Larkin, Ian. "Bargains-then-ripoffs: Innovation, Pricing and Lock-in in Enterprise Software." Academy of Management Annual Meeting Proceedings (2008).
  8. Negotiations versus Auctions: New Advice for Buyers

    Keywords: Negotiation; Auctions; Information;

    Citation:

    Larkin, Ian. "Negotiations versus Auctions: New Advice for Buyers." Negotiation 10, no. 8 (August 2007).

Working Papers

  1. The Dirty Laundry of Employee Award Programs: Evidence from the Field

    Many scholars and practitioners have recently argued that corporate awards are a "free" way to motivate employees. We use field data from an attendance award program implemented at one of five industrial laundry plants to show that awards can carry significant spillover costs and may be less effective at motivating employees than the literature suggests. Our quasi-experimental setting shows that two types of unintended consequences limit gains from the reward program. First, employees strategically game the program, improving timeliness only when eligible for the award, and call in sick to retain eligibility. Second, employees with perfect pre-program attendance or high productivity suffered a 6-8% productivity decrease after program introduction, suggesting they were demotivated by awards for good behavior they already exhibited. Overall, our results suggest the award program decreased plant productivity by 1.4%, and that positive effects from awards are accompanied by more complex employee responses that limit program effectiveness.

    Keywords: Motivation and Incentives; Service Delivery; Performance Productivity; Failure; Service Industry;

    Citation:

    Gubler, Timothy, Ian I. Larkin, and Lamar Pierce. "The Dirty Laundry of Employee Award Programs: Evidence from the Field." Harvard Business School Working Paper, No. 13-069, February 2013.
  2. Social Comparisons and Deception Across Workplace Hierarchies: Field and Experimental Evidence

    We examine how unfavorable social comparisons differentially spur employees of varying hierarchical levels to engage in deception. Drawing on literatures in social psychology and workplace self-esteem, we theorize that negative comparisons with peers could cause either junior or senior employees to seek to improve reported relative performance measures via deception. In a first study, we use deceptive self-downloads on SSRN, the leading working paper repository in the social sciences, to show that employees higher in a hierarchy are more likely to engage in deception, particularly when the employee has enjoyed a high level of past success. In a second study, we confirm this finding in two scenario-based experiments. Our results suggest that longer-tenured and more successful employees face a greater loss of self-esteem from negative social comparisons and are more likely to engage in deception in response to reported performance that is lower than that of peers.

    Keywords: Ethics; Personal Development and Career; Behavior; Competitive Strategy; Competitive Advantage;

    Citation:

    Edelman, Benjamin, and Ian Larkin. "Social Comparisons and Deception Across Workplace Hierarchies: Field and Experimental Evidence." Harvard Business School Working Paper, No. 09-096, February 2009. (Revised August 2013.)

Other Publications and Materials

  1. Paying $30,000 for a Gold Star: An Empirical Investigation into the Value of Peer Recognition to Software Salespeople

    Citation:

    Larkin, Ian I. "Paying $30,000 for a Gold Star: An Empirical Investigation into the Value of Peer Recognition to Software Salespeople."
  2. Bargains-then-ripoffs: Innovation, Pricing and Lock-in in Enterprise Software

    Citation:

    Larkin, Ian I. "Bargains-then-ripoffs: Innovation, Pricing and Lock-in in Enterprise Software."

Cases and Teaching Materials

  1. V-Cola: Confidential Instructions for Connie Sultant

    Citation:

    Larkin, Ian. "V-Cola: Confidential Instructions for Connie Sultant." Harvard Business School Supplement 912-046, April 2012.
  2. V-Cola (TN)

    Citation:

    Larkin, Ian. "V-Cola (TN)." Harvard Business School Teaching Note 912-042, March 2012.
  3. V-Cola: Confidential Instructions for Cash Adman

    Citation:

    Larkin, Ian. "V-Cola: Confidential Instructions for Cash Adman." Harvard Business School Supplement 912-044, March 2012.
  4. V-Cola: Confidential Instructions for Cly Entman

    Citation:

    Larkin, Ian. "V-Cola: Confidential Instructions for Cly Entman." Harvard Business School Supplement 912-045, March 2012.
  5. V-Cola: Confidential Instructions for Mark Ketting

    Citation:

    Larkin, Ian. "V-Cola: Confidential Instructions for Mark Ketting." Harvard Business School Supplement 912-047, March 2012.
  6. V-Cola: Confidential Instructions for C.F. Oh

    Citation:

    Larkin, Ian. "V-Cola: Confidential Instructions for C.F. Oh." Harvard Business School Supplement 912-048, March 2012.
  7. V-Cola: Confidential Instructions for Price Down

    This is information for one of the six roles to be used in the V-Cola negotiation exercise. Please see V-Cola General Instructions (912043) and Teaching note (912042) for full information.

    Citation:

    Larkin, Ian. "V-Cola: Confidential Instructions for Price Down." Harvard Business School Supplement 912-049, March 2012. (Revised April 2013.)
  8. Arck Systems

    The Arck Systems series of cases describes the dilemmas faced by a senior sales manager in determining a sales compensation plan at an enterprise software company. The existing compensation plan is aggressive and highly rewards "star" performers. The cases track a series of changes the manager makes to the sales compensation plan in response to negative and unintended consequences of the existing system. The cases illustrate the tradeoffs inherent in incentive plans (even outside of sales environments) and presents a framework for the design and management of incentive systems. It also is useful in addressing employee response to incentive system change.

    Keywords: Compensation and Benefits; Retention; Performance Effectiveness; Salesforce Management; Motivation and Incentives; Software; Information Technology Industry;

    Citation:

    Larkin, Ian. "Arck Systems." Harvard Business School Case 911-056, March 2011. (Revised March 2012.)
  9. Ponce de Leon (TN)

    Citation:

    Larkin, Ian. "Ponce de Leon (TN)." Harvard Business School Teaching Note 912-041, March 2012.
  10. V-Cola: General Instructions

    V-Cola is a six-party exercise that simulates a negotiation between a boutique advertising agency and a beverage company that is launching a new product. Each of the six parties has different incentives and information, which leads to a complex, realistic simulation about agency issues, misaligned incentives, the value of information, and the (mis)use of contingent contracts.

    Keywords: Advertising Industry;

    Citation:

    Larkin, Ian. "V-Cola: General Instructions." Harvard Business School Case 912-043, March 2012. (Revised July 2012.)
  11. Arck Systems (TN) (A), (B), (C), (D), (E) and (F)

    Teaching Note for 911056, 911057, 911058, 911059, 911060 and 911073.

    Citation:

    Larkin, Ian. "Arck Systems (TN) (A), (B), (C), (D), (E) and (F)." Harvard Business School Teaching Note 911-074, June 2011. (Revised March 2012.)
  12. Ponce de Leon: Confidential Instructions for Poppie Santoni, Director

    Citation:

    Larkin, Ian. "Ponce de Leon: Confidential Instructions for Poppie Santoni, Director." Harvard Business School Case 912-040, March 2012.
  13. Ponce de Leon: Confidential Instructions for Donald Sanger, Chief Financial Officer, Panama Studios

    Citation:

    Larkin, Ian. "Ponce de Leon: Confidential Instructions for Donald Sanger, Chief Financial Officer, Panama Studios." Harvard Business School Case 912-039, March 2012.
  14. Ponce de Leon: Confidential Instructions for Elaine Bennett

    Citation:

    Larkin, Ian. "Ponce de Leon: Confidential Instructions for Elaine Bennett." Harvard Business School Case 912-037, March 2012.
  15. Ponce de Leon: Confidential Instructions for Newman Knight, Elaine Bennett's Agent

    Citation:

    Larkin, Ian. "Ponce de Leon: Confidential Instructions for Newman Knight, Elaine Bennett's Agent." Harvard Business School Case 912-038, March 2012.
  16. Arck Systems (B)

    The Arck Systems series of cases describes the dilemmas faced by a senior sales manager in determining a sales compensation plan at an enterprise software company. The existing compensation plan is aggressive and highly rewards "star" performers. The cases track a series of changes the manager makes to the sales compensation plan in response to negative and unintended consequences of the existing system. The cases illustrate the tradeoffs inherent in incentive plans (even outside of sales environments) and presents a framework for the design and management of incentive systems. It also is useful in addressing employee response to incentive system change.

    Keywords: Change; Framework; Compensation and Benefits; Management; Organizational Design; Outcome or Result; Performance Evaluation; Sales; Motivation and Incentives; System; Software;

    Citation:

    Larkin, Ian. "Arck Systems (B)." Harvard Business School Supplement 911-057, March 2011. (Revised June 2011.)
  17. Arck Systems (C)

    The Arck Systems series of cases describes the dilemmas faced by a senior sales manager in determining a sales compensation plan at an enterprise software company. The existing compensation plan is aggressive and highly rewards "star" performers. The cases track a series of changes the manager makes to the sales compensation plan in response to negative and unintended consequences of the existing system. The cases illustrate the tradeoffs inherent in incentive plans (even outside of sales environments) and presents a framework for the design and management of incentive systems. It also is useful in addressing employee response to incentive system change.

    Keywords: Change; Framework; Compensation and Benefits; Employees; Management; Organizational Design; Outcome or Result; Performance Evaluation; Sales; Motivation and Incentives; System; Software;

    Citation:

    Larkin, Ian. "Arck Systems (C)." Harvard Business School Supplement 911-058, March 2011. (Revised June 2011.)
  18. Arck Systems (D)

    The Arck Systems series of cases describes the dilemmas faced by a senior sales manager in determining a sales compensation plan at an enterprise software company. The existing compensation plan is aggressive and highly rewards "star" performers. The cases track a series of changes the manager makes to the sales compensation plan in response to negative and unintended consequences of the existing system. The cases illustrate the tradeoffs inherent in incentive plans (even outside of sales environments) and presents a framework for the design and management of incentive systems. It also is useful in addressing employee response to incentive system change.

    Keywords: Motivation and Incentives; Salesforce Management; Compensation and Benefits;

    Citation:

    Larkin, Ian. "Arck Systems (D)." Harvard Business School Supplement 911-059, March 2011. (Revised June 2011.)
  19. Arck Systems (E)

    The Arck Systems series of cases describes the dilemmas faced by a senior sales manager in determining a sales compensation plan at an enterprise software company. The existing compensation plan is aggressive and highly rewards "star" performers. The cases track a series of changes the manager makes to the sales compensation plan in response to negative and unintended consequences of the existing system. The cases illustrate the tradeoffs inherent in incentive plans (even outside of sales environments) and presents a framework for the design and management of incentive systems. It also is useful in addressing employee response to incentive system change.

    Keywords: Transformation; Framework; Compensation and Benefits; Organizational Design; Performance Evaluation; Salesforce Management; Motivation and Incentives; Software;

    Citation:

    Larkin, Ian. "Arck Systems (E)." Harvard Business School Supplement 911-060, March 2011. (Revised June 2011.)
  20. Arck Systems (F)

    The Arck Systems series of cases describes the dilemmas faced by a senior sales manager in determining a sales compensation plan at an enterprise software company. The existing compensation plan is aggressive and highly rewards "star” performers. The cases track a series of changes the manager makes to the sales compensation plan in response to negative and unintended consequences of the existing system. The cases illustrate the tradeoffs inherent in incentive plans (even outside of sales environments) and presents a framework for the design and management of incentive systems. It also is useful in addressing employee response to incentive system change.

    Keywords: Motivation and Incentives; Salesforce Management; Compensation and Benefits;

    Citation:

    Larkin, Ian. "Arck Systems (F)." Harvard Business School Supplement 911-073, June 2011.
  21. Negotiating Star Compensation at the USAWBL (A-1): Confidential Instructions for Jesse J.

    In this three-party negotiation exercise, Jesse J, star center in the U.S.A. Women's Basketball League, with her agent, is negotiating a possible compensation package with the Boston Sharks involving a base salary, a possible share of team merchandising profits, and a performance incentive. Each player (Jesse J, her agent, the Sharks general manager) has a confidential brief as the basis for the negotiation.

    Keywords: Compensation and Benefits; Contracts; Negotiation Process; Negotiation Tactics; Conflict and Resolution; Sports; Sports Industry; United States;

    Citation:

    Larkin, Ian, James K. Sebenius, and Guhan Subramanian. "Negotiating Star Compensation at the USAWBL (A-1): Confidential Instructions for Jesse J." Harvard Business School Case 906-026, January 2006. (Revised October 2009.)
  22. Negotiating Star Compensation at the USAWBL (A-2): Confidential Instructions for the Boston Sharks General Manager

    Keywords: Negotiation; Compensation and Benefits; Sports; Sports Industry; Boston;

    Citation:

    Larkin, Ian, James K. Sebenius, and Guhan Subramanian. "Negotiating Star Compensation at the USAWBL (A-2): Confidential Instructions for the Boston Sharks General Manager." Harvard Business School Supplement 906-027, January 2006. (Revised October 2009.)
  23. Negotiating Star Compensation at the USAWBL (A-3): Confidential Instructions for Jesse J's Agent

    Citation:

    Larkin, Ian, James K. Sebenius, and Guhan Subramanian. "Negotiating Star Compensation at the USAWBL (A-3): Confidential Instructions for Jesse J's Agent." Harvard Business School Supplement 906-028, January 2006. (Revised October 2009.)
  24. Negotiating Star Compensation at the USAWBL (A-4): Confidential Instructions for the Boston Sharks Chief Financial Officer

    Keywords: Negotiation; Compensation and Benefits; Information; Management;

    Citation:

    Larkin, Ian, and Nithyasri Sharma. "Negotiating Star Compensation at the USAWBL (A-4): Confidential Instructions for the Boston Sharks Chief Financial Officer." Harvard Business School Supplement 910-019, October 2009.
  25. Technology transfer and innovation at China's First Auto Works

    Keywords: Technological Innovation; Technology; Auto Industry; China;

    Citation:

    Larkin, Ian. "Technology transfer and innovation at China's First Auto Works." 2007. (Haas School of Business case, used in MBA and executive education programs.)