Symbolic Awards at Work: A Regression Discontinuity Design

62 Pages Posted: 4 Jan 2019 Last revised: 14 Mar 2020

See all articles by Teng Li

Teng Li

Sun Yat-sen University

Runjing Lu

University of Alberta - Department of Finance

Date Written: December 20, 2018

Abstract

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. Interestingly, the performance difference is mainly driven by winners earning less rather than losers' earning more. Several mechanisms, such as signaling, effort reallocation, licensing, mean reversion, conformity preference, and strategic reallocation across time or across teammates, are tested and ruled out. One mechanism, which we have empirical support for, is peer sabotage of winners triggered by the award designation. Finally, we examine spillover effects of the award and find no evidence that coworkers of winners and losers perform differently in any measurable aspects after the award.

Keywords: Symbolic award, Peer sabotage, Spillover effect

JEL Classification: M52, J24

Suggested Citation

Li, Teng and Lu, Runjing, Symbolic Awards at Work: A Regression Discontinuity Design (December 20, 2018). Available at SSRN: https://ssrn.com/abstract=3304436 or http://dx.doi.org/10.2139/ssrn.3304436

Teng Li

Sun Yat-sen University ( email )

135, Xingang Xi Road
Guangzhou, Guangdong 510275
China

Runjing Lu (Contact Author)

University of Alberta - Department of Finance ( email )

Edmonton, Alberta T6G 2R3
Canada

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