How Relative Performance Information Affects Employee Performance: A Systematic Review of Empirical Research

Abstract

This paper provides an overview of empirical findings on how Relative Performance Information (RPI) affects employee performance through various facets of behavior. Additionally, the review identifies future research opportunities. It moreover contains a systematic analysis of the literature incorporating findings across several disciplines and providing replicable, extensive coverage. The studies are integrated in a novel conceptual framework. The results indicate that the effect of RPI on performance through enhanced effort is positive. Publicity and performance-dependent compensation strengthen the effect. However, RPI has also been found to increase sabotage among employees and it can lead to less honest reporting. Future research may examine critical mediators and moderators of the RPI-performance relation and thus complement the findings. Additionally, the effects of group-based RPI are still underrepresented. Future work needs to assess in further detail how RPI interacts with culture and norms and how individuals react to RPI due to their personal expectations. Additionally, there is a need for further research regarding the effects of RPI on cooperation, its consequences for learning, on how it affects budgeting, and its implications for risk taking.