Abstract
In this paper, we study the effects of non-monetary symbolic awards on winners, losers, and their peers. Using a regression discontinuity design, we examine post-award performance differences between those who barely won a symbolic performance award and those who came just short of winning the award in a large insurance company (Study 1). Our findings show that awarded workers performed worse than their non-awarded counterparts, and worse performance was more severe in more competitive teams. Building on these findings, we explore potential mechanisms using an incentivized real-effort experiment (Study 2). The experiment reveals that award winners’ worse post-award performance relative to unawarded workers was driven by social undermining in the form of deliberate sabotage by coworkers, rather than award winners’ own behavioral changes due to negative motivational effects.
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