Social undermining as a dark side of symbolic awards: Evidence from a regression discontinuity design☆

https://doi.org/10.1016/j.obhdp.2022.104184Get rights and content
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Highlights

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    Recipients of a symbolic performance award perform worse relative to their prior level and relative to nonrecipients after the award is conferred.

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    Award-induced social undermining of award recipients by coworkers is the main culprit.

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    Organizations should take precautions in addressing award-induced social undermining to prevent negative effects of awards from offsetting the overall benefits.

Abstract

In this paper, we study the effects of non-monetary symbolic awards on winners, losers, and their peers. Using a regression discontinuity design, we examine post-award performance differences between those who barely won a symbolic performance award and those who came just short of winning the award in a large insurance company (Study 1). Our findings show that awarded workers performed worse than their non-awarded counterparts, and worse performance was more severe in more competitive teams. Building on these findings, we explore potential mechanisms using an incentivized real-effort experiment (Study 2). The experiment reveals that award winners’ worse post-award performance relative to unawarded workers was driven by social undermining in the form of deliberate sabotage by coworkers, rather than award winners’ own behavioral changes due to negative motivational effects.

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☆

An earlier version of this paper circulated under the name "Symbolic Awards at Work: A Regression Discontinuity Design.” We are grateful to Evan Polman (the associate editor) and three anonymous referees for their insightful comments. We are deeply indebted to Gordon Dahl and Lorenz Goette for their support and guidance. We would also like to thank Ach Adhvaryu, Anik Ashraf, Pranshant Bharadwaj, Leonardo Burtstyn, Julie Cullen, Jeffrey Clemens, Robert Dur, Jana Gallus, Susanne Neckermann, Ricardo Perez-Truglia, Sally Sadoff, Marta Serra-Garcia, participants at SOLE, EMCON, Warwick PhD conference, ACLEC, UCSD seminars, and NUS seminars for their helpful comments. Finally, we thank Manman Cai, Bing Ling, Jinyang Ren, and students in the Yunzhouxing group for their help with the experiment in Study 2. All errors are our own.

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