TY  - RPRT
        AU  - Gill, David
AU  - Kissová, Zdenka
AU  - Lee, Jaesun
AU  - Prowse, Victoria L.
        TI  - First-Place Loving and Last-Place Loathing: How Rank in the Distribution of Performance Affects Effort Provision
        PY  - 2015/Aug/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 9286
        UR  - https://www.iza.org/publications/dp9286
        AB  - Rank-order relative-performance evaluation, in which pay, promotion and symbolic awards depend on the rank of workers in the distribution of performance, is ubiquitous. Whenever firms use rank-order relative-performance evaluation, workers receive feedback about their rank. Using a real-effort experiment, we aim to discover whether workers respond to the specific rank that they achieve. In particular, we leverage random variation in the allocation of rank among subjects who exerted the same effort to obtain a causal estimate of the rank response function that describes how effort provision responds to the content of rank-order feedback.
We find that the rank response function is U-shaped. Subjects exhibit 'first-place loving' and 'last-place loathing', that is subjects increase their effort the most after being ranked first or last. We discuss implications of our findings for the optimal design of firms' performance feedback policies, workplace organizational structures and incentives schemes.
        KW  - taste for rank
KW  - fixed wage
KW  - flat wage
KW  - real effort experiment
KW  - dynamic effort provision
KW  - rank order feedback
KW  - relative performance feedback
KW  - relative performance evaluation
KW  - status seeking
KW  - social esteem
KW  - self esteem
KW  - public feedback
KW  - private feedback
        ER  -