Social Comparison and Performance: Evidence from a Randomised Workplace Experiment

In this study, we combine literatures on understanding productivity enhancements with behavioural economics to explore whether a foundational insight gained from the latter literature can speak to the former. Specifically, this study will empirically investigate the role of social comparison in affecting the employee’s performance in the context of a bank. In many production processes, output is a function not only of the effect of a single worker, but also of the combined effect of many workers. We attempt to investigate how workers influence each other at workplace. That is, we ask how workers react to the rank incentives compared with the productivity of their co-workers. A local rural and commercial bank in China provides us an ideal laboratory to look into the question. The bank has 83 branches located across the city and employees in each branch work as a group. We randomly select employees to be exposed to performance rankings within the bank through the use of an app on mobile phone. We will examine the effect of the rank incentives on employees’ performance and how different are the effects.