Motivating Low Performers with Input-based Relative Performance Feedback

Abstract

A growing challenge for firms is delivering performance feedback that motivates low-performing employees. Our study examines whether this can be achieved by providing relative performance feedback based on inputs, which is relative performance feedback featuring more controllable performance measures. We predict that input-based relative performance feedback increases feelings of being in control and provides concrete guidance on how low performers can improve. To test our prediction, we conducted a field experiment in a sales department of a software firm. Our findings support our prediction by showing that input-based relative performance feedback increases input-based performance among low performers without affecting high performers. We also find that it increases low performers’ contributions to the firm’s outputs. Our study adds an important refinement to how relative performance feedback facilitates upward social comparison and has implications for firms seeking to motivate low performers in their workforce.

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

JEL Classification: C93, D91, M40, M41