Employee Recognition and Performance: a Field Experiment∗

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Employee Recognition and Performance: A Field Experiment∗
Christiane Bradler† Robert Dur‡ Susanne Neckermann§ Arjan Non¶ , , , January 2013

Abstract This paper reports the results from a natural field experiment designed to investigate the causal effect of public recognition on employee performance. More than 300 employees worked on a three-hour data-entry task, where we randomized the unannounced provision of recognition after two hours of work. We find that recognition increases subsequent performance substantially, and particularly so when recognition is exclusively provided to the best performers. Remarkably, workers who did not receive recognition are mainly responsible for this performance increase. This result is consistent with workers having a preference for conformity and has implications for reward policies in firms.

JEL Classifications: C93, M52 Keywords: employee motivation, recognition, reciprocity, conformity, field experiment.

We gratefully acknowledge comments and suggestions by Iwan Barankay, Gary Charness, Dirk Engelmann, Guido Friebel, David Gill, Michael Kosfeld, Steve Levitt, John List, Dina Pomeranz, and participants to the 2011 Advances with Field Experiments Workshop at the University of Chicago, the 2011 ZEW/Tinbergen Institute Workshop on Behavioural Personnel Economics in Mannheim, the 2011 ROA Workshop on ‘Cognitive and Non-Cognitive Skills over the Life Cycle’ in Maastricht, the 2012 Colloquium on Personnel Economics at the University of Paderborn, the 2012 IMEBE Conference in Castellon, the 2012 Workshop on the Social Dimension of Organizations in Budapest, the 2012 CESifo Area Conference on Employment and Social Protection, the 2012 annual meeting of the Verein fuer Socialpolitik in Goettingen, and seminar participants at the universities of Chicago, Frankfurt, Mannheim, and Rotterdam. The experiment has been conducted within the ethical guidelines of our home institutions. † ZEW Centre for European Economic Research Mannheim. E-mail: bradler@zew.de. ‡ Erasmus University Rotterdam. E-mail: dur@ese.eur.nl. § Erasmus University Rotterdam and ZEW. E-mail: neckermann@ese.eur.nl. ¶ University of Maastricht. E-mail: j.non@maastrichtuniversity.nl.



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Introduction

Recent years have seen a surge in popular business books on the importance of recognition for employee motivation. A prominent example is the book by Nelson (2005) entitled 1001 Ways to Reward Employees. He starts his book by stating that a number of surveys “confirm what almost every employee already knows: that recognition for a job well done is the top motivator of employee performance.”1 Other questionnaire studies reveal similar views among employees (Kovach, 1995; Wiley, 1997) and managers (Holton et al., 2009). The vast amount of practitioner’s literature on employee recognition is supported by a body of academic research in organizational and personnel psychology. Stajkovic and Luthans (2003) give an overview of field-experimental studies and report strong positive effects of recognition on employees’ performance in a variety of workplace contexts. More recently, Grant and Gino (2010) experimentally study how a manager’s verbal expression of gratitude affects employees’ effort and find strong positive effects.2 While the existing literature provides a fairly consistent picture that recognition promotes employee performance, much less is known about how exclusive or inclusive recognition should be. Should all employees receive recognition? Or is more differentiation desirable? In particular, does providing recognition to all workers demoralize the top-performers, thus creating a culture of mediocrity? Or does reserving praise for the best performers come at the cost of discouraging the less gifted employees? In this paper we take up these questions by conducting a large-scale field experiment in a natural working environment. Over the course of November 2010 to May 2011, we hired more than 300 people (mainly students)...
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