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The Provision of Relative Performance Feedback: An Analysis of Performance and Satisfaction
Author(s) -
Azmat Ghazala,
Iriberri Nagore
Publication year - 2015
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/jems.12151
Subject(s) - incentive , task (project management) , position (finance) , computer science , performance improvement , simulation , control theory (sociology) , operations management , economics , microeconomics , control (management) , artificial intelligence , management , finance
This paper studies the effect of providing relative performance feedback on individuals’ performance, under two incentive schemes. In a laboratory setup, agents perform a real‐effort task. We show that relative performance feedback increases performance when performance is related to pay (piece‐rate) but has no effect on performance when pay is independent of performance (flat‐rate). These effects are independent of the agent's relative position. Subjects are also asked to rate their satisfaction during the experiment. We find that under flat‐rate, feedback has no effect on agents’ satisfaction, while under piece‐rate, feedback about relative position affects satisfaction.