Symbolic Awards at Work: A Regression Discontinuity Design
62 Pages Posted: 4 Jan 2019 Last revised: 14 Mar 2020
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. 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: Suggested Citation