Feedback Spillover Effect on Competitiveness Across Unrelated Tasks

Abstract

Employees typically work on multiple tasks that require unrelated skills and abilities. While past research strongly supports that relative performance feedback influences employee performance and effort allocation, little is known about the effect of relative performance feedback on employee competitiveness. Using a lab experiment, we study and confirm a complementary feedback spillover effect—relative performance feedback in the first task positively affects competitiveness in the unrelated second task. Furthermore, we find that the effect operates jointly and independently through belief- and taste-altering mechanisms. The results have important implications for organizations to understand both the power and the limitations of using relative performance feedback as an intervention policy in the design of accounting, control, and reporting systems. JEL Classifications: C72; C91. Data Availability: Go to: https://doi.org/10.17029/654cbcca-6e02-4bb2-aff6-41607a2a23d5

The Impact of Executives’ Gender, Financial Incentives, and Shareholder Pressure on Corporate Social and Ecological Investments

“…Specifically, we expect that programs with a stronger focus on financial goal achievement lead to executives focusing on short-term financial performance, while programs with a stronger focus on sustainable goal achievement encourage executives' CSR spending (Flammer et al 2019). Furthermore, we argue that, due to spillover effects, executives' real-life incentive program affects their general CSR decision-making, which then also translates to our experiment (Huang and Murad 2020;Pierce et al 2016). Applied to our experiment, this would mean that greater relevance of financial goals achievement in executives' incentive program leads executives' to focus more on short-term financial return when making the experimental CSR investment decisions.…”

Protecting organizational competitiveness from the hazards of knowledge leakage through HRM

“…We noted a research gap regarding the relationship of knowledge-oriented HR practices with organizational competitiveness. Previous scholarly works have reported a positive influence of knowledge-oriented HR practices on a firm's human capital, knowledge worker capability, innovation, organizational effectiveness and learning (Huang and Murad, 2020; Taghizadeh et al , 2020; Antunes and Pinheiro, 2020; Kianto et al , 2019; Khan et al , 2019; Donate and Guadamillas, 2015). However, the impact of knowledge-oriented HR practices on organizational competitiveness was largely missing in empirical investigation, though these factors ultimately contribute to organizational competitive position.…”

“…In such a scenario, their lab experiment concluded that job rotation makes employees more competitive, which adds to overall human capital and organizational competitiveness. These practices support organizational KM through knowledge retention, creation and sharing (Donate and Guadamillas, 2015; Khan et al , 2019; Huang and Murad, 2020).…”

“…Drawing on the KBV, firms need to encourage retention and share knowledge within the firm (Huang and Murad, 2020; Taghizadeh et al , 2020; Antunes and Pinheiro, 2020; Kianto et al , 2019; Khan et al , 2019; Donate and Guadamillas, 2015). TCE in such cases highlights the importance of knowledge-oriented HR practices to share and retain knowledge, which is beneficial for the organizational KM practices but is rarely investigated (Taghizadeh et al , 2020; Lin et al ., 2016).…”

Performance Feedback and Peer Effects

“…Relative feedback in one task may even increase confidence biases in other activities. There is some evidence both from the field (Banerjee et al 2020) and the lab (Huang and Murad 2019) that being informed that one is better than the rivals in one task inflates beliefs on one's ability to succeed when competing in another, unrelated activity. By contrast, receiving bad news in the prior activity does not affect beliefs about the ability to succeed in the subsequent task.…”