Performance rankings affect worker effort: researchers

Workers love being at the top of the performance scale and will do their best to stay there. Employees dread being at the bottom of the scale and will scramble mightily to ascend. New findings by Victoria Prowse, ILR School assistant professor and a labor and experimental economist, and other researchers suggest workers at the far ends of the performance bell curve try harder and workers in the middle put in less effort. "First-place loving and last-place loathing: How rank in the distribution of performance affects effort provision" was published this month. Despite popular use of worker ranking by employers worldwide, there has been little consensus on how workers respond to this type of feedback until now, Prowse said: "Bonuses, promotions, performance appraisals and symbolic awards often depend on how well employees rank relative to similar workers in the firm. It is important to know what effect this feedback has on those receiving the news." She continued, "Our research finds the specific rung that someone is on in the ranking ladder determines how much effort they put in afterward [being ranked]. Findings suggest ranking is particularly effective in incentivizing individuals who put in very good or very poor performances at work." The research was based on experiments with 300 Oxford University students divided into groups of 17.