We use a quasi-experimental research design to study the effect of giving workers feedback on their relative performance. The setting is a firm in which workers are paid piece rates and where, for exogenous reasons, management begins to reveal to workers their relative position in the distribution of pay and productivity. We find that merely providing this information leads to a large and long-lasting increase in productivity that is costless to the firm. Our findings are consistent with the interpretation that workers’ incipient concerns about their relative standing are activated by information about how they are performing relative to others.
Tournaments Without Prizes: Evidence from Personnel Records – Management Science4 10 2012