First-Place Loving and Last-Place Loathing : How Rank in the Distribution of Performance Affects Effort Provision
Rank-order relative-performance evaluation, in which pay, promotion and symbolic awards depend on the rank of workers in the distribution of performance, is ubiquitous. Whenever firms use rank-order relative-performance evaluation, workers receive feedback about their rank. Using a real-effort experiment, we aim to discover whether workers respond to the specific rank that they achieve. In particular, we leverage random variation in the allocation of rank among subjects who exerted the same effort to obtain a causal estimate of the rank response function that describes how effort provision responds to the content of rank-order feedback. We find that the rank response function is U-shaped. Subjects exhibit 'first-place loving' and 'last-place loathing,' that is subjects increase their effort the most after being ranked first or last. We discuss implications of our findings for the optimal design of firms' performance feedback policies, workplace organizational structures and incentives schemes
Year of publication: |
2017
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Authors: | Gill, David ; Kissova, Zdenka ; Lee, Jaesun ; Prowse, Victoria L. |
Publisher: |
[S.l.] : SSRN |
Saved in:
freely available
Extent: | 1 Online-Ressource (42 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | In: Management Science Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 22, 2015 erstellt |
Other identifiers: | 10.2139/ssrn.2641875 [DOI] |
Classification: | C23 - Models with Panel Data ; C91 - Laboratory, Individual Behavior ; J22 - Time Allocation and Labor Supply ; M12 - Personnel Management |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10014035887