How relative performance information affects employee behavior: a systematic review of empirical research

PurposeThis paper provides an overview of the empirical findings on how relative performance information (RPI) affects employee behavior. Additionally, the review identifies future research opportunities based on a systematic analysis of the literature that incorporates findings across several disciplines and provides replicable, extensive coverage.Design/methodology/approachThis paper addresses a research gap via synthesis, drawing on the empirical literature identified and analyzed systematically. A conceptual framework is developed to integrate the studies.FindingsThe effect of RPI on performance through enhanced effort is positive; moreover, publicity and performance-dependent compensation strengthen the effect. However, RPI has also been found to increase sabotage among employees, and it can lead to less honest reporting. Future research could examine critical mediators and moderators of the RPI-performance relationship and thus complement the findings. Additionally, the effects of group-based RPI remain underrepresented. Future work could help to assess in greater detail how RPI interacts with culture and norms and whether RPI is due to personal expectations. There is also room for further research regarding the effects of RPI on cooperation, its consequences for learning, how it affects budgeting decisions and its implications for risk taking.Originality/valueThis paper presents the first literature review in the field of RPI. It provides synthesized knowledge about whether RPI is beneficial or detrimental to organizational performance.

How Relative Performance Information Affects Exploration-exploitation Decisions

Employees often make recurring decisions that entail deciding whether to continue using a “status quo” strategy that yields reliable results or try an alternative strategy of unknown efficacy. Via an experiment, we study how relative performance information (RPI) influences this choice and its expected outcome. We theorize and find that RPI has both a social motivational effect that increases employees’ propensity to explore alternative strategies and an informational effect that helps them determine whether exploring alternative strategies will likely help or harm their performance (i.e., it conveys decision-facilitating benefits). Likewise, as predicted, we also find that RPI’s decision-facilitating benefit occurs more strongly among low- versus high-performing employees. Our study helps inform employers about the decision-facilitating implications of incorporating RPI into their performance feedback systems.

Task satisfaction: the effect of relative performance information versus outcome feedback

PurposeIn this empirical study, the primary aim is to examine whether the type of feedback provided, relative performance information (RPI) vs outcome, affects individual's task satisfaction in a context without financial incentives. A secondary objective is to explore whether differences in individuals' task satisfaction were associated with their performance level.Design/methodology/approachParticipants completed a mundane, effort-based task in a 1 × 2 between-subjects experimental design where the type of feedback was manipulated at two levels (RPI vs outcome).FindingsThe results revealed a positive link between providing RPI feedback to individuals and their self-reported task satisfaction compared to individuals provided with outcome feedback. We find that individuals' task satisfaction is not associated with their task performance, supporting our prediction that the level of knowledge of results affects individuals' task satisfaction.Research limitations/implicationsThe experimental task used in this study was mundane and effort intensive. Consequently, future research may be needed to examine whether the results generalize to more creative, less effort-intensive tasks. This study also utilized student participants as a proxy for employees, which is appropriate for the task, but may not generalize to organizational settings requiring specialized knowledge or task experience.Practical implicationsThe findings suggest that organizations may find providing employees with RPI to be a relatively low-cost, non-financial incentive for improving employee task satisfaction, a construct documented to reduce employee turnover and absenteeism.Originality/valueWhile prior research focuses on the effects of providing RPI on individuals' performance and effort, this study extends prior research to individuals' task satisfaction, an affective construct, illustrating that RPI is multi-dimensional. Our results also have implications for theory. We extend the feedback proposition of the widely applied Job Characteristics Model (JCM) by illustrating the type of feedback provided to individuals has task satisfaction effects beyond those associated with the mere presence of feedback.

Pengaruh Horizon Skema Turnamen dan Frekuensi Publikasi Informasi Relatif Terhadap Kinerja Karyawan

The quality of human resources is one of primary keys to the success of company. Indicators of high-quality human resources can be reflected in improvements in employee performance. Stream of research has examined various efforts to encourage employee performance improvement, one of which is through the optimization of incentive schemes. This study investigates the effect of the tournament scheme horizon and the publication frequency of relative performance information on performance. This study uses an experimental method with a 3 x 2 factorial design between subjects. The horizontal scheme is manipulated into 3 (Hybrid vs. Repeated vs. Grand), while the frequency of publication of relative performance information is manipulated to 2 (high vs. low). The results of this study indicate that the tournament scheme horizon as a basis for monetary incentives is quite effective in driving performance improvement. In contrast, the publication frequency of relative performance information as an effort to compare social conditions and not as a basis for monetary incentives is not strong enough to trigger performance improvements. As a rational economic man, the attempt to pursue incentives can prove to be a trigger for efforts to drive performance improvements that are greater than the pursuit of non-monetary incentives.Keywords: Employee performance; Monetary; Non-monetary; Publication frequency of relative performance information; Tournament Abstrak Kualitas sumber daya manusia merupakan salah satu kunci utama suksesnya perusahaan. Indikator dari tingginya kualitas sumber daya manusia dapat tercermin dari peningkatan kinerja karyawan. Perkembangan penelitian telah mengkaji beragam upaya untuk mendorong peningkatan kinerja karyawan salah satunya melalui optimalisasi skema insentif. Penelitian ini menginvestigasi pengaruh horizon skema turnamen dan frekuensi publikasi informasi kinerja relatif terhadap kinerja. Penelitian ini menggunakan metode eksperimen dengan desain faktorial 3 x 2 antar-subjek. Horizon skema turmanen dimanipulasi menjadi 3 (Hibrida vs. Berganda vs. Tunggal) sementara frekuensi publikasi informasi kinerja relatif dimanipulasi menjadi 2 (tinggi vs. rendah). Hasil penelitian ini menunjukkan bahwa horizon skema turnamen sebagai dasar insentif moneter cukup efektif mendorong peningkatkan kinerja. Sementara frekuensi publikasi informasi kinerja relatif sebagai upaya perbadingan kondisi secara sosial dan tidak sebagai dasar pemberian insentif moneter, tidak cukup kuat memicu peningkatan kinerja. Sebagai manusia ekonomi yang rasional upaya untuk mengejar insentif terbukti dapat menjadi pemicu usaha untuk mendorong peningkatan kinerja yang lebih besar daripada upaya pengejaran insentif non-moneter.Kata kunci: Informasi kinerja relative; Kinerja karyawan; Moneter; Non-moneter; Turnamen