Motivating Low Performers with Input-Based Relative Performance Feedback: Evidence from a Field Experiment

Abstract

A significant challenge firms face is providing performance feedback that effectively motivates low-performing employees. In our field experiment, we examined the impact of an often-overlooked form of relative performance feedback that emphasizes comparing employees based on their inputs. Our results indicate that input-based relative performance feedback enhances the input-performance of low performers without adversely affecting high performers. Furthermore, our field experiment demonstrates that carefully choosing the right type of input can substantially increase low performers' contributions to a firm's overall output. Together, our findings support our prediction that input-based relative performance feedback provides a viable strategy for low performers to narrow the performance gap with high performers by guiding them toward the crucial inputs high performers use to generate output. Our study adds an important refinement to our understanding of how relative performance feedback promotes upward social comparison and facilitates social learning, offering insights for firms aiming to motivate low performers in their workforce.

Keywords: Relative performance feedback, field experiment, social comparison, inputs, ranking, performance measurement.

JEL Classification: C93, D91, M40, M41