Group Relative Performance Information – Evidence from a Staggered Adoption

Abstract

This study investigates the individual performance consequences of adopting unrewarded group relative performance information (RPI). Using proprietary data from a non-profit clinic, we exploit the staggered feature of the adoption of unrewarded group RPI on a reporting task and find that performance increases by 55.5 % when physicians are provided with group RPI. This overall improvement in performance can be divided into the initial treatment effect (10.5 %) and marginally decreasing improvements in performance (starting from 7.8 % per month) over time. Furthermore, we find significant variation in the improvement of performance, which is dependent on (1) the prior performance rank of the group, (2) the size of the group and (3) the task heterogeneity within the group. In sum, our study implies that group RPI can be effective in eliciting higher individual performance even when performance is not tied to financial incentives, and that the effectiveness of such group RPI is dependent on the conditions under which group RPI is implemented.

Daniel Schaupp

Assistant Professor of Strategy and Managerial Accounting

My research interests include performance evaluation, feedback, incentives and the impact of new digital technologies on management control.