TOURNAMENT BONUSES IN LAHORE-BASED SOFTWARE HOUSES: SPRINT VELOCITY AND DEVELOPER SATISFACTION

Abstract

This study explores the impact of tournament-like bonuses on the speed and developer satisfaction in agile software development teams in Lahore, Pakistan. A quasi-experimental panel study was conducted over 9 months with 142 participants from small software organizations. The research examines whether performance-based bonuses improve sprint productivity and how they affect developer satisfaction. The study uses a mixed-method approach, including Jira metrics (velocity, bug rates), employee satisfaction surveys, burnout questionnaires, and HR exit logs. A difference-in-differences (DiD) estimator and placebo checks were applied to ensure robustness. Results indicate that while sprint velocity increased (beta = 1.12, p < .01), developer satisfaction decreased significantly (beta = -0.89, p < .05) over the 9-month period. Additionally, employee attrition increased by 4.7%, highlighting the negative long-term effects of performance-based contests. The findings suggest that while tournaments may boost short-term productivity, they may lead to lower morale and higher turnover. Software companies need to consider justice and fairness in the design of incentive systems to maintain developer satisfaction.