How the Changing Labor Economy Affects the Value of Providing Relative Performance Information to Employees

• In Event: 1.03 Relative Performance Information

Abstract

Technological advances are causing employers to incorporate more decision-making responsibility into a given job and automate and/or outsource its routinized components (i.e., those that are clerical in nature or require manual labor). We investigate how these changes in the labor economy affect the value of providing employees with relative performance information (RPI), a popular type of performance feedback that helps employees compare their performance to that of their co-workers. Prior research suggests that providing RPI induces employees to provide more routinized effort. We predict that incorporating more decision-making responsibility into a job weakens this effort-inducing benefit. However, we predict that removing routinized work from a job enables a previously undocumented decision-facilitating benefit of RPI to emerge. We report results from an experiment that provide support for these hypotheses. We also find that RPI provides neither an effort-inducing nor a decision-facilitating benefit when job roles consist of a blend of decision-making and routinized work. Our results suggest that on-going changes in the labor economy are likely to weaken the effort-inducing benefit of providing RPI for a job but enable a novel decision-facilitating benefit of doing so to emerge. We discuss this and other implications of our findings for the design of performance feedback systems.

Authors

• Andrew H Newman, University of South Carolina

• Bryan Richard Stikeleather, University of South Carolina

• Nathan Waddoups, University of South Carolina