Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/208096
Authors: 
Ashraf, Anik
Year of Publication: 
2019
Series/Report no.: 
Discussion Paper No. 196
Abstract: 
Can a firm increase its workers' eff ort by introducing competition through performance-based ranking? On one hand such ranking can increase eff ort because of individuals' desire for status from high ranks, but on the other, it can demotivate them or make them wary of outperforming peers. This paper disentangles the e ffects of demotivation, social conformity, and status associated with ranking through a randomized experiment at a Bangladeshi sweater factory. Treated workers receive monthly information on their relative performance either in private or in public. Both a simple theoretical framework and empirical evidence from the field show that workers' intrinsic desire to be good at work induces privately ranked workers to increase eff ort upon receiving positive feedback, but they get demotivated and decrease e ffort upon receiving negative feedback. Public ranking lead to lower net eff ort relative to private ranking because of a strong preference not to outperform friends. The negative e ffects from demotivation and social conformity may explain why the existing literature finds mixed evidence of impact of ranking workers.
Subjects: 
Peer Effects
Productivity
Rank Incentives
JEL: 
D23
J53
O15
Document Type: 
Working Paper

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