First-place loving and last-place loathing: how rank in the distribution of performance affects effort provision
| Autor: | Victoria L. Prowse, Zdenka Kissová, Jaesun Lee, David Gill |
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| Rok vydání: | 2020 |
| Předmět: |
rank order feedback
J22 real effort experiment Strategy and Management media_common.quotation_subject jel:C23 Distribution (economics) dynamic effort provision Management Science and Operations Research fixed wage private feedback relative performance evaluation public feedback jel:J22 Promotion (rank) Leverage (negotiation) C91 0502 economics and business ddc:330 flat wage 050207 economics Marketing self esteem Function (engineering) media_common M12 050208 finance jel:C91 business.industry 05 social sciences Rank (computer programming) Self-esteem taste for rank Incentive jel:M12 relative performance feedback Organizational structure status seeking social esteem business Psychology relative performance evaluation relative performance feedback rank order feedback dynamic effort provision real effort experiment flat wage fixed wage taste for rank status seeking social esteem self esteem public feedback private feedback C23 |
| Popis: | Rank-order relative-performance evaluation, in which pay, promotion, symbolic awards, and educational achievement depend on the rank of individuals in the distribution of performance, is ubiquitous. Whenever organizations use rank-order relative-performance evaluation, people receive feedback about their rank. Using a real-effort experiment, we aim to discover whether people 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 work hardest after being ranked first or last. We discuss implications of our findings for the optimal design of performance feedback policies, workplace organizational structures, and incentives schemes. Data and the supplementary web appendix are available at https://doi.org/10.1287/mnsc.2017.2907 . This paper was accepted by Uri Gneezy, behavioral economics. |
| Databáze: | OpenAIRE |
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