Social Comparison in the Workplace: Evidence from a Field Experiment

Alain Cohn, Ernst Fehr, Benedikt Herrmann (benedikt.herrmann@ec.europa.eu) and Frédéric Schneider
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Benedikt Herrmann: European Commission

No 5550, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We conducted a randomized field experiment to examine how workers respond to wage cuts, and whether their response depends on the wages paid to coworkers. Workers were assigned to teams of two, performed identical individual tasks, and received the same performance – independent hourly wage. Cutting both team members' wages caused a substantial decrease in performance. When only one team member's wage was cut, the performance decrease for the workers who received the cut was more than twice as large as the individual performance decrease when both workers' wages were cut. This finding indicates that social comparison processes among workers affect effort provision because the only difference between the two wage cut conditions is the other team member's wage level. In contrast, workers whose wage was not cut but who witnessed their team member's pay being cut displayed no change in performance relative to the baseline treatment in which both workers' wages remained unchanged, indicating that social comparison exerts asymmetric effects on effort.

Keywords: field experiment; fairness; compensation; social comparison (search for similar items in EconPapers)
JEL-codes: C93 J33 M53 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2011-03
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-hrm, nep-lab and nep-soc
References: View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Published - revised version published as 'Social Comparison an Effort Provision' in: Journal of the European Economic Association, 2014, 12 (4), 877-898

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Working Paper: Social comparison in the workplace: evidence from a field experiment (2011)
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