The Accounting Review · 2012 · 233 citations · 36 references
Social SciencesEconomicsPsychologyBehavioral EconomicsContract TheoryExperimental DesignAsymmetric InformationInformation AsymmetryInformation EconomicsInformation RevelationPerformance-based CompensationPerformance-based PayBargaining With Private InformationContracting With Private InformationData AvailabilityIndividual Performance EvaluationPerformance Information QualityRelative Performance Analysis
ABSTRACT: This study investigates the conditions under which providing relative performance information to employees has a positive effect on performance when compensation is not tied to peer performance. Specifically, I investigate, via an experiment, the effect of relative performance information (present or absent) on performance under two compensation contracts (flat-wage or individual performance-based). Given the presence of relative performance information, I examine the effect of the type of relative performance information (private or public) on performance. Using theory from psychology, I predict and find that relative performance information positively affects performance under the two compensation contracts and that this positive effect is greater under an individual performance-based contract than under a flat-wage contract. I also predict and find that, although both public and private relative performance information have a positive effect on performance, the effect is greater when relative performance information is public. Data Availability: Data are available from the author on request.
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A Theory of Social Comparison Processes
Léon Festinger · Human Relations · 1954 · 20.3K citations
z-Tree: Zurich toolbox for ready-made economic experiments
Urs Fischbacher · Experimental Economics · 2007 · 9.9K citations · Full text
Rank-Order Tournaments as Optimum Labor Contracts
Edward P. Lazear, Sherwin Rosen · Journal of Political Economy · 1981 · 4.6K citations · Full text