Motivating low performers with input-based relative performance feedback

Abstract

A significant challenge firms face is providing performance feedback that effectively motivates low-performing employees. In our field experiment, we examine the impact of an often-overlooked form of relative performance feedback (RPF) that emphasizes comparing employees based on their inputs. Our results indicate that input-based RPF enhances the input performance of low performers without adversely affecting high performers. Furthermore, our field experiment demonstrates that selecting the right input—specifically, actions that employees can control and that are linked to outputs—can significantly boost low performers' contributions to a firm's overall output. Together, our findings support our prediction that input-based RPF provides a viable strategy for low performers to narrow the performance gap with high performers by guiding them toward the crucial inputs that high performers use to generate output. Our study adds an important refinement to our understanding of how RPF promotes upward social comparison and facilitates social learning, offering insights for firms aiming to motivate low performers in their workforce.