Prof. Dr. Mischa Seiter
Institute for Business Analytics
Ulm University
email: mischa.seiter(at)uni-ulm.de
How do performance comparisons affect employee performance?
Sometimes less is more
A research group from Ulm University (Prof. Mischa Seiter & Dr. Maximilian Kohler) and the Frankfurt School of Finance & Management (Prof. Matthias Mahlendorf & Prof. Timo Vogelsang) has investigated the effects of relative performance information (RPI) in the context of a supermarket chain.
Result 1
More detailed performance information leads to poorer results in low-yield tasks without significantly improving performance in other tasks.
Ergebnis 2
Higher performers recognise that good overall performance can be achieved even if they reduce their efforts in low-yield tasks.
Ergebnis 3
Less than a third of employees access the performance information. Why this is the case should be clarified in follow-up studies.
The Experiment
In a field experiment, employees at the butcher's counter in a supermarket chain were confronted with relative performance information (RPI) on their sales figures. 410 people in 42 supermarkets were divided into different groups and their performance was documented over a period of three months.
The control group only received information on their (relative) sales performance, while the other two groups only or additionally received (relative) information on their sales performance in the meat and sausage areas separately.
Conclusion: more is not always better
Modern technology offers more and more opportunities to provide data in order to facilitate decision-making processes or increase motivation. However, companies should pay attention to what performance information is provided and in which form. More is not always better!
Literature
KOHLER, M., MAHLENDORF, M.D., SEITER, M. and VOGELSANG, T. (2024), Social Comparison on Multiple Tasks: Sacrificing Overall Performance for Local Excellence?.Journal of Accounting Research, 62: 1309-1361. https://doi.org/10.1111/1475-679X.12535