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The provision of relative performance feedback information: an experimental analysis of performance and happiness

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  • Azmat, Ghazala
  • Iriberri, Nagore

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.

Suggested Citation

  • Azmat, Ghazala & Iriberri, Nagore, 2012. "The provision of relative performance feedback information: an experimental analysis of performance and happiness," LSE Research Online Documents on Economics 121935, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:121935
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    File URL: http://eprints.lse.ac.uk/121935/
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    More about this item

    Keywords

    relative performance; feedback; piece-rate; flat-rate; happiness;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • D00 - Microeconomics - - General - - - General

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