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The Provision of Relative Performance Feedback Information: An Experimental Analysis of Performance and Happiness

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  • Ghazala Azmat
  • Nagore Iriberri

Abstract

This paper studies the effect of providing relative performance feedback information on individuals' performance and affective response, under both piece-rate and flat-rate incentives. In a laboratory setup, agents perform a real effort task and when receiving feedback, they are asked to rate their happiness, arousal and feeling of dominance. Control subjects learn only their absolute performance, while the treated subjects additionally learn the average performance in the session. Under piece-rate, performance is 17 percent higher when relative performance feedback is provided. Furthermore, although feedback increases the performance independent of the content (i.e., performing above or below the average), the content is determinant for the affective response. When subjects are treated, the inequality in the happiness and the feeling of dominance between those subjects performing above and below the average increases by 8 and 6 percentage points, respectively. Under flat-rate, we do not find any effect on either of the outcome variables.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1116.

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Date of creation: Jan 2012
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Handle: RePEc:cep:cepdps:dp1116

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: Relative performance; feedback; piece-rate; flat-rate; happiness;

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Cited by:
  1. Stephen Eliot Hansen, 2010. "The Benefits of Limited Feedback in Organizations," Working Papers 490, Barcelona Graduate School of Economics.
  2. Bigoni, Maria & Fort, Margherita & Nardotto, Mattia & Reggiani, Tommaso, 2011. "Teams or Tournaments? A Field Experiment on Cooperation and Competition among University Students," IZA Discussion Papers 5844, Institute for the Study of Labor (IZA).

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