Less Information, More Comparison, and Better Performance: Evidence from a Field Experiment

Journal of Accounting Research, Volume 59, Issue 2

Posted: 24 May 2021

See all articles by Henry Eyring

Henry Eyring

London School of Economics & Political Science (LSE); Harvard University - Business School (HBS)

Patrick J. Ferguson

The University of Melbourne

Sebastian Koppers

affiliation not provided to SSRN

Date Written: May 1, 2021

Abstract

We use a field experiment in professional sports to compare effects of providing absolute, relative, or both absolute and relative measures in performance reports for employees. Although studies have documented that the provision of these types of measures can benefit performance, theory from economic and accounting literature suggests that it may be optimal for firms to direct employees’ attention to some types of measures by omitting others. In line with this theory, we find that relative performance information alone yields the best performance effects in our setting—that is, that a subset of information (relative performance information) dominates the full information set (absolute and relative performance information together) in boosting performance. In cross-sectional and survey-data analyses, we do not find that restricting the number of measures shown per se benefits performance. Rather, we find that restricting the type of measures shown to convey only relative information increases involvement in peer-performance comparison, benefitting performance. Our findings extend research on weighting of and responses to measures in performance reports.

Keywords: performance information; peer comparison; competition; learning; field experiment

JEL Classification: C93, D83, D90, M40, M51, M54

Suggested Citation

Eyring, Henry and Ferguson, Patrick J. and Koppers, Sebastian, Less Information, More Comparison, and Better Performance: Evidence from a Field Experiment (May 1, 2021). Journal of Accounting Research, Volume 59, Issue 2, Available at SSRN: https://ssrn.com/abstract=3850349

Henry Eyring (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Patrick J. Ferguson

The University of Melbourne ( email )

Parkville, 3010
Australia

Sebastian Koppers

affiliation not provided to SSRN

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
240
PlumX Metrics