Management Accounting Section Midyear Meeting

The Effect of Relative Performance Information Level on Team Performance

• In Event: Performance Management

Abstract

In team tasks, firms face the challenge of designing control systems that effectively motivate both effort at the individual level and coordination at the team level. This study investigates, via an experiment, how the level of relative performance information (no RPI versus individual RPI versus team RPI) interacts with task interdependence in influencing team performance. We predict and find that when task interdependence is absent, both individual RPI and team RPI have a positive effect on team performance compared to when no RPI is provided. In contrast, we find that when task interdependence is present, individual RPI has a negative effect on team performance and team RPI has a positive effect on team performance compared to when RPI is not provided. The evidence further shows that, when task interdependence is present, individual RPI leads to lower team performance because individual RPI hurts coordination among team members without inducing higher individual efforts and team RPI leads to greater team performance because team RPI induces greater individual efforts and sustains an effective conversion of individual efforts to team performance. Our results expand our knowledge about how and why the RPI level influences team performance.

Authors

• Bei Shi, University of Amsterdam

• Ivo D. Tafkov, Georgia State University

• Flora H. Zhou, Bentley University