Enduring Effects of Relative Performance Information in a Complex Work Environment

Abstract

This study explores whether introducing transparency about relative performance information (RPI) can effectively increase performance of an important task that is not tied to financial incentives of the organization or employee. Therefore, we analyze proprietary data from a medical center, where a reporting tool with aggregated RPI about discharge letter process times is introduced. The process of creating discharge letters represents an important reporting task in a complex working environment. Controlling for patient- and treatment-related factors as well as ward and time specific fixed effects, we find that establishing RPI significantly improves performance by decreasing the average total process times by 59.7 %. This overall reduction in process times can be divided into the initial treatment effect (-23.9 %) and marginally decreasing reductions over time. We understand these performance improvements as a type of learning process caused by social comparison, which starts after the treatment and stabilizes at a high level. Our paper contributes by demonstrating the effectiveness of RPI in a complex work environment, while showing that performance increases are not only significant but also enduring.

Daniel Schaupp

Assistant Professor of Management Accounting

My research interests include contemporary performance management systems, transparency and the impact of digitalization on management accounting.