Social Undermining as a Dark Side of Symbolic Awards: Evidence from a Regression Discontinuity Design
81 Pages Posted: 4 Jan 2019 Last revised: 17 Jun 2021
Date Written: December 20, 2018
This paper studies the effects of a non-pecuniary symbolic award on winners, losers, and their peers using a regression discontinuity design. We identify newly recruited insurance salespeople who barely won a quarterly "Best Rookie" award and their counterparts who barely missed it in a large insurance company. Our main finding is that barely winners earn less life insurance commission than barely losers in the quarter following the award designation. The performance difference is driven by winners earning less rather than losers earning more. We test multiple mechanisms, and social undermining on winners triggered by the award is most consistent with our evidence. Finally, we find no evidence that coworkers of winners and losers perform differently after the award, implying that symbolic awards may adversely impact winners without generating positive spillover effects.
Keywords: Symbolic award, Social undermining, Spillover effect
JEL Classification: M52, J24
Suggested Citation: Suggested Citation