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Tournaments without prizes: evidence from personnel records

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We use a quasi-experimental research design to study the introduction of a relative performance evaluation without introducing relative performance pay. The setting is a firm in which workers are paid piece rates and where, at some point, management begins to reveal to workers their relative position in the distribution of pay and productivity. We find that merely providing this information leads to a large and permanent increase in productivity that is costless to the firm. Our findings are consistent with the interpretation that workers' incipient concerns about their relative standing are activated by information about how they are performing relative to others.

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en

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http://eprints.lse.ac.uk/31722/

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