Feedback Spillover Effect on Competitiveness Across Unrelated Tasks

Employees typically work on multiple tasks that require unrelated skills and abilities. While past research strongly supports that relative performance feedback influences employee performance and effort allocation, little is known about the effect of relative performance feedback on employee competitiveness. Using a lab experiment, we study and confirm a complementary feedback spillover effect — relative performance feedback in the first task positively affects competitiveness in the unrelated second task. Furthermore, we find that the effect operates jointly and independently through belief- and taste-altering mechanisms. The results have important implications for organizations to understand both the power and the limitations of using relative performance feedback as an intervention policy in the design of accounting, control, and reporting systems