The Importance of Relative Performance Feedback Information: Evidence from a Natural Experiment Using High School Students

Azmat, Ghazala; Iriberri, Nagore

doi:10.2139/ssrn.1428283

“…give students a greater motivation, make them more self-con dent, and ultimately induce them to exert more e ort in their studies (Clark et al, 2010;Azmat & Iriberri, 2010). E ort, in turn, would increase the marginal gains from schooling, and induce students to choose more schooling.…”

Section: Rank Provides Incomplete Information Of One's Own Abilitymentioning

confidence: 99%

A Big Fish in a Small Pond: Ability Rank and Human Capital Investment

Elsner

¹

,

Isphording

²

2017

Journal of Labor Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in EconStor may D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. We study the impact of a student's ordinal rank in a high school cohort on educational attainment several years later. To identify a causal effect, we compare multiple cohorts within the same school, exploiting idiosyncratic variation in cohort composition. We find that a student's ordinal rank significantly affects educational outcomes later in life. If two students with the same ability have a different rank in their respective cohort, the higher-ranked student is significantly more likely to finish high school, attend college, and complete a 4-year college degree. These results suggest that low-ranked students under-invest in their human capital even if they have a high ability compared to most students of the same age. Exploring potential channels, we find that students with a higher rank have higher expectations about their future career, a higher perceived intelligence, and receive more support from their teachers. NON-TECHNICAL SUMMARYParents often believe that high-ability classmates have a positive influence on their children, and potential classmates are often a decisive factor for choosing a school. In this paper, we show that having high-ability peers in school is not beneficial for everyone. A student who is surrounded by peers that are smarter than herself has a low ordinal rank within her peer group, which may come with some disadvantages. While she may benefit from studying with smarter peers, she may experience a disadv...

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“…9 The effect of relative performance feedback on performance has recently been studied in a variety of contexts, ranging from student test scores (Bandiera et al, 2009;Azmat and Iriberri, 2010;Tran and Zeckhauser, 2012), contributions to an online community (Chen et al, 2010), real-effort in the lab (Charness et al, 2012;Freeman and Gelber, 2010;Kuhnen and Tymula, 2012), to workers' performance in a real working environment (Falk and Ichino, 2006;Delfgaauw et al, forthcoming;Blanes i Vidal and Nossol, 2011;Barankay, 2011a,b). With the noteworthy exception of Barankay (2011a,b), all of these papers find that relative performance feedback has on average a positive effect on performance.…”

Section: Conformity Preferences Of Employeesmentioning

confidence: 99%

Employee Recognition and Performance: A Field Experiment

Bradler

¹

,

Dur

²

,

Neckermann

³

et al. 2016

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Non-technical SummaryRecognition is an important source of employee motivation. But how should managers allocate recognition: should they praise all? Or should they recognize only extraordinary performances? This issue has not yet been addressed sufficiently. On the one hand, exclusive recognition might raise the performance of high-performers even further as they feel acknowledged and motivated by the public praise. However, this might come at the cost of discouraging and frustrating the non-recipients. On the other hand, non-recipients might respond positively as they are encouraged to catch up with the high-performers while the latter might rest on their laurels. We tackle this research question by conducting a field experiment which investigates the causal effect of recognition on work performance. We hired more than 300 workers for a three-hour data-entry job. After two hours of work, we randomized the provision of unannounced recognition by handing out a thank-you card, which was personally signed by the head of the research institute. By varying the number of recipients of the thank-you card we were able to study the effect of exclusive recognition. Depending on the treatment, we assigned a thank-you card either to the best one, the best three, or all workers of a work group. We find that recognition significantly increases subsequent performance, and in particular so if recognition is exclusively provided to the best performers. Recognition to the best three performers in a group yields the largest effect on workers' productivity in comparison with either recognition to all employees or recognition to the best performer. Interestingly, performance increases in response to exclusive recognition are mainly driven by strong positive effects of non-recipients. Conformity preferences are the most likely reason for these responses. Upon learning that one does not belong to the best three performers in a group of eight, non-recipients feel inclined to improve performance so as to adhere to the apparent group norm. In line with this interpretation, we find weaker (but still positive) responses of non-recipients when only the best performer in a group receives recognition as this provides a weaker signal of low relative performance than belonging to the bottom five out of eight workers. However, conformity preferences cannot explain all of our results. In particular, recipients of recognition do not decrease performance, as conformity would suggest, but rather (a...

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“…Maslow (1943) views status as a basic human need, and Huberman et al (2004, p. 103) infer from a study of five societies that "subjects valued status independently of any monetary consequence." There is considerable evidence from research in modern economics to the effect that the desire to avoid low rank motivates workers to exert more effort (Neckermann & Frey, 2008;Kuhnen & Tymula, 2009;Duffy & Kornienko, 2010;Kosfeld & Neckermann, 2011), and students to perform better (Bandiera et al 2009;Azmat & Iriberri, 2010). Contemporary evidence nicely supports Smith's assessment of the power of the incentive to escape low rank as distinct from the desire for the tangible benefits associated with high rank.…”

Section: Social Comparisons: Ordinal Preferencesmentioning

confidence: 92%

Behavior in Reverse: Reasons for Return Migration

Stark

¹

2018

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractReceived research shows numerous motives for migration, but fewer reasons for return migration. This paper aims to correct this imbalance. Twelve reasons for return migration are presented and discussed briefly. The reasons listed are derived from research on migration conducted by the author in the course of the past three and a half decades. The purpose of the paper is to pull together the insights gained from that research so as to formulate a base for future inquiry, both analytical and empirical. In addition, just as research on motives for migration can help to establish the reasons for return migration, research on the latter can help to deepen understanding of the former. Moreover, in a great many circumstances and for a variety of reasons, countries that host migrants may want them to leave. In such circumstances, enacting policies that align with motives for return migration will be more efficient than devising measures that are independent of these motives.

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The Importance of Relative Performance Feedback Information: Evidence from a Natural Experiment Using High School Students

Cited by 80 publications

References 48 publications

A Big Fish in a Small Pond: Ability Rank and Human Capital Investment

A Big Fish in a Small Pond: Ability Rank and Human Capital Investment

Employee Recognition and Performance: A Field Experiment

Behavior in Reverse: Reasons for Return Migration

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