The Dark Side of Competition for Status

Abstract

Unethical behavior within organizations is not rare. We investigate experimentally the role of status-seeking behavior in sabotage and cheating activities aiming at improving one’s performance ranking in a flat-wage environment. We find that average effort is higher when individuals are informed about their relative performance. However, ranking feedback also favors disreputable behavior. Some individuals do not hesitate to incur a cost to improve their rank by sabotaging others’ work or by increasing artificially their own performance. Introducing sabotage opportunities has a strong detrimental effect on performance. Therefore, ranking incentives should be used with care. Inducing group identity discourages sabotage among peers but increases in-group rivalry

The Impact of Peer Presence on Cheating

“…However, evidence on cheating in social or peer settings or personal interactions is rather scarce. The multitude of studies on worker behavior under tournament compensation schemes, under which employees compete for a bonus (see Lazear and Rosen 1981), tell us that it is a powerful motivational instrument, but that it also induces unwanted behavior, such as rat races or unproductive behavior in the form of sabotage or cheating (e.g., Berger, Harbring, and Sliwka 2012;Cadsby, Song, and Tapon 2010;Charness, Masclet, and Villeval 2014;Gilpatric 2011;Harbring and Irlenbusch 2011;Schwieren and Weichselbaumer 2010). 9 The majority of studies on cheating in social settings contain elements of monetary and/or task interaction, thereby impeding the measurement of pure peer effects in cheating.…”

Do You Prefer Having More or More than Others in the Workplace? A Quasi‐experimental Survey in Algeria

“…For instance, using an experimental setting, Charness et al . () show that some participants are willing to engage in unethical behaviors (e.g., sabotaging peers' work) in order to improve their status. Competition for relative position is a wasteful exercise and drives people to engage in socially undesirable behaviors (e.g., longer working hours, stress, and debt), which can ultimately result in decreased happiness (Frank, ) and contribute to under‐development (Grolleau et al ., ).…”

Excludability: A laboratory study on forced ranking in team production

“…Competition may discourage teamwork and become detrimental in very different ways. Charness et al (2013) and Berger et al (2013) observe the emergence of disreputable behavior in two experiments in which participants sabotage others' work to increase their chances of winning the competition. Bandiera et al (2013) find strategic partner selection when rank incentives are introduced, as workers choose to be part of teams with other workers of similar ability to avoid competition, leading to substantial drops in performance.…”