Christine Harbring

Sabotage in Tournaments: Evidence from a Laboratory Experiment

Although relative performance schemes are pervasive in organizations, reliable empirical data on induced sabotage behavior are almost nonexistent. We study sabotage in repeated tournaments in a controlled laboratory experiment and observe that effort and sabotage are higher for higher wage spreads. Additionally, we find that also in the presence of tournament incentives, agents react reciprocally to higher wages by exerting higher effort. Destructive activities are reduced by explicitly calling them by their name “sabotage.” Communication among principal and agents can curb sabotage when they agree on flat prize structures and increased output. If sabotage is not possible, the principals choose tournament incentives more often. This paper was accepted by Peter Wakker, decision analysis.

Sabotage in Corporate Contests – An Experimental Analysis

Abstract In corporate contests, employees compete for a prize. Ideally, contests induce employees to exert productive effort which increases their probability of winning. In many environments, however, employees can also improve their own ranking position by harming their colleagues. Such negative incentive effects of corporate contests are largely unexplored, which can partly be attributed to the fact that sabotaging behavior is almost unobservable in the field. In this study we analyze behavior in experimental contests with heterogeneous players who are able to mutually sabotage each other. We find that sabotaging behavior systematically varies with the composition of different types of contestants. Moreover, if the saboteur’s identity is revealed sabotage decreases while retaliation motives prevail. Our results promise to be valuable when designing corporate contests.

Performance Appraisals and the Impact of Forced Distribution---An Experimental Investigation

A real-effort experiment is investigated in which supervisors have to rate the performance of individual workers who in turn receive a bonus payment based on these ratings. We compare a baseline treatment in which supervisors are not restricted in their rating behavior to a forced distribution system in which they have to assign differentiated grades. We find that productivity is significantly higher under a forced distribution by about 6% to 12%. However, the productivity effects are less clear cut when participants have prior experience with the baseline condition. Moreover, a forced distribution becomes detrimental when workers have access to a simple option to sabotage each other. This paper was accepted by Peter Wakker, decision analysis.

Feedback in Tournaments under Commitment Problems: Experimental Evidence

We theoretically as well as experimentally analyze tournaments in which one of the agents leads over the other before entering the tournament, that is, in which one of the competitors benefits from a head start. The principal may decide upon informing the agents about the degree of this asymmetry. She cannot commit to giving feedback ex ante or not and, thus, chooses the strategy that is optimal for her ex post. In equilibrium, the principal reveals information if the asymmetry is not too large. Our experimental findings qualitatively confirm our theoretical prediction. Moreover, behavior of the principal and the agents is well aligned to each other.

On the Competition of Asymmetric Agents

Abstract Rank-order tournaments are usually implemented in organizations to provide incentives for eliciting employees’ effort and/or to identify the agent with the higher ability, for example in promotion tournaments. We close a gap in the literature by experimentally analyzing a ceteris paribus variation of the prize spread - being the major design feature of tournaments - in a symmetric and an asymmetric setting. We find that effort significantly increases with the prize spread as predicted by standard theory. However, only for sufficiently large prize spreads weak players competing against strong players strain themselves all the more and sorting of agents is feasible.

Peers at work: Economic real-effort experiments in the presence of virtual co-workers

Traditionally, experimental economics uses controlled and incentivized field and lab experiments to analyze economic behavior. However, investigating peer effects in the classic settings is challenging due to the reflection problem: Who is influencing whom? To overcome this, we enlarge the methodological toolbox of these experiments by means of Virtual Reality. After introducing and validating a real-effort sorting task, we embed a virtual agent as peer of a human subject, who independently performs an identical sorting task. We conducted two experiments investigating (a) the subjects productivity adjustment due to peer effects and (b) the incentive effects on competition. Our results indicate a great potential for Virtual-Reality-based economic experiments.

Personnel economics: A research field comes of age

The application of economic theory and principles to firms’ human resource problems is commonplace today. Personnel economics has come a long way since its early days in the late 1970s and 1980s, when scholars developed its theoretical foundations. In this contribution and introduction to the Special Issue ‘Advances in personnel economics’ of the German Journal of Human Resource Management, we would like to illustrate the origins of the field, outline how personnel economics relates to other research areas, describe major developments in the field and address its future challenges.

Trust and Control at the Workplace

Summary Based on two representative samples of employees, the German Socio Economic Panel and the European Social Survey, we explore the relation between certain measures of control in employment relationships (i. e. working time regulations, use of performance appraisal systems, monitoring by supervisors, autonomy to organize the work) and individuals’ inclination to trust others. Trust is measured by the general trust question like in most other economic studies based on surveys. We find that strict working time regulations, monitoring and lack of autonomy - all indicators for control at the workplace - are negatively associated with trust. Monitoring also moderates the relation between the existence of a formal performance appraisal system and individuals’ trust.Moreover,we contribute to the literature on trust by gathering hints to other potential correlates of trust.