Rumors, Worker Productivity, and Team Performance

Abstract

Rumors are ubiquitous in the workplace, particularly regarding organizational changes. These rumors significantly influence worker behavior by introducing uncertainty, and thus, affect productivity and team performance. However, no studies have provided empirical evidence for these impacts due to data limitations on rumors and workers' behaviors in completing tasks. Using the National Basketball Association (NBA) as our context, we obtain a repository of rumors about player trades and collect granular data on players' oncourt behaviors, productivity, and game outcomes. Our results show that rumors have a positive impact on player productivity and team performance. Employing a two-stage least squares approach, we provide causal evidence to support these findings. Next, by characterizing players' effort, team engagement, and mistakes as mediators, we investigate the underlying mechanisms behind the positive impact of rumors on productivity. Our mediation results suggest that rumors can enhance players' effort and team engagement to improve productivity, while they can undermine productivity by raising the likelihood of mistakes. Additionally, we find that effort mediates the effect of rumors on increasing team engagement and mistakes. Taken together, these findings contribute to the literature by elucidating the complex role of rumors in the workplace and their performance implications. We also offer new insights for managers, emphasizing the importance of managing informal communications and worker effort to harness their positive effects while mitigating their risks.

Keywords: rumors, effort, worker productivity, team performance, basketball games