The power of comparisons: Peer information as a management tool

Abstract

While previous research has explored how performance data can influence organizations and considered the factors that shape public managers' use of performance data, we know less about the way in which individual bureaucrats respond to performance information. Considerable research illustrates the power of peer information in a variety of contexts, including energy use, voting, and charitable giving. We suggest that public employees may adjust their behavior in response to information about how their performance compares with their peers. Providing peer information to public employees allows for learning. If alerted to an unflattering comparison, public employees might be motivated to alter their behavior. Using the case of administrative law judges in the Social Security Disability programs, we find evidence that is consistent with the expectation that individual bureaucrats respond to peer information. This study provides insight into whether and how public managers can harness the power of peer information.