The Effect of Relative Performance Information Under Different Incentive Schemes on Performance in a Production Task

ABSTRACT This study investigates how relative performance information (RPI) affects employee performance and allocation of effort across tasks in a multi-task environment. Based on behavioral theories, we predict that the social comparison process inherent in RPI induces both a motivation effect that results in increased effort as well as an effort distortion effect that results in the distortion of effort allocations across tasks away from the firm-preferred allocations. We also predict that both effects are magnified when the RPI is public compared to private. We argue that although the motivation effect will generally benefit performance, the effort distortion effect may be detrimental to performance. We design an experiment that isolates these two effects. Consistent with our predictions, we find that RPI induces both motivation and effort distortion effects and that both effects are magnified when the RPI is public rather than private. Although the motivation effect increases performance, we demonstrate that the effort distortion effect can decrease performance. By isolating the motivation and effort distortion effects, our study provides insights into the costs and benefits of RPI in a multi-task environment. As such, it informs accountants regarding the design of information systems and when tasks should be aggregated or disaggregated across employees. Data Availability: Data are available from the authors upon request.

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I Know Something You Don't Know: The Effect of Relative Performance Information and Individual Performance Incentives on Knowledge Sharing

Journal of Management Accounting Research ◽

10.2308/jmar-52152 ◽

2018 ◽

Vol 31 (2) ◽

pp. 19-35 ◽

Cited By ~ 9

Author(s):

Leslie Berger ◽

Krista Fiolleau ◽

Carolyn MacTavish

Keyword(s):

Knowledge Sharing ◽

Interactive Effect ◽

Individual Performance ◽

Relative Performance ◽

Performance Information ◽

Performance Incentives ◽

Passive Behavior ◽

Knowledge Sharing Behavior ◽

Relative Performance Information ◽

Sharing Behavior

ABSTRACT When employees share knowledge with their colleagues, the efficiency of the colleagues' performance improves, which positively affects their productivity. However, employees can engage in counterproductive behavior by choosing not to share knowledge (passive behavior) or by choosing to share inaccurate knowledge with their colleagues (active behavior). In this study, we examine how providing relative performance information (RPI) and rewarding individuals with performance-based incentives can jointly affect individuals' choices to engage in counterproductive knowledge sharing behavior. Using an experiment, we identify an interactive effect of RPI and individual incentives, such that participants engage in counterproductive knowledge sharing behavior most frequently when they receive RPI and are assigned individual performance-based incentives. We also observe that RPI increases the frequency of both active and passive counterproductive knowledge sharing behavior.

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The Effect of Relative Performance Information on Knowledge Sharing among Employees

SSRN Electronic Journal ◽

10.2139/ssrn.3275320 ◽

2018 ◽

Author(s):

Christian Schnieder ◽

Friedrich Sommer ◽

Arnt Wöhrmann

Keyword(s):

Knowledge Sharing ◽

Relative Performance ◽

Performance Information ◽

Relative Performance Information

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Private and Public Relative Performance Information under Different Compensation Contracts

The Accounting Review ◽

10.2308/accr-50292 ◽

2012 ◽

Vol 88 (1) ◽

pp. 327-350 ◽

Cited By ~ 84

Author(s):

Ivo D. Tafkov

Keyword(s):

Individual Performance ◽

Relative Performance ◽

Data Availability ◽

Performance Information ◽

Public And Private ◽

Compensation Contracts ◽

Private And Public ◽

Relative Performance Information ◽

Wage Contract ◽

Positive Effect

ABSTRACT: This study investigates the conditions under which providing relative performance information to employees has a positive effect on performance when compensation is not tied to peer performance. Specifically, I investigate, via an experiment, the effect of relative performance information (present or absent) on performance under two compensation contracts (flat-wage or individual performance-based). Given the presence of relative performance information, I examine the effect of the type of relative performance information (private or public) on performance. Using theory from psychology, I predict and find that relative performance information positively affects performance under the two compensation contracts and that this positive effect is greater under an individual performance-based contract than under a flat-wage contract. I also predict and find that, although both public and private relative performance information have a positive effect on performance, the effect is greater when relative performance information is public. Data Availability: Data are available from the author on request.

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