Feedback culture: When colleagues become competitors
Study by IESE Business School and Max Planck Institute for Human Development finds giving relative performance feedback creates destructive competition
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Feedback is regarded as a crucial component of a successful business culture. Used correctly, it can enhance performance and teamwork. But how do different types of feedback impact interactions among employees? In a recent study, researchers from the Max Planck Institute for Human Development and IESE Business School investigated which types of feedback tend to lead to cooperative behaviors and which to competitive behaviors.
The experiment
112 students of different disciplines and 28 managers, all of whom had at least seven years of professional experience, were invited to participate in a laboratory experiment. Groups of four participants played variants of a classic public goods game. Each player was given a fixed number of points to invest per round. Over ten rounds, they were asked to decide how many points they wanted to invest in a group project and how many in their own individual project. The rewards for cooperative behavior differed across the two experimental scenarios, impacting participants’ scores and ultimately how much money they were paid.
In the first scenario, cooperative behavior on average led to a better score for the group, but to a worse score on the personal level. In the second scenario, cooperation paid off for both the group and the individual. Uncooperative behavior reduced the overall score, but harmed the other players more than it did the individual participant.
After each round, the participants received feedback—either just on their own performance (individualistic feedback) or additional feedback on how they ranked relative to the other players (ranking feedback) or on the performance of the group as a whole (joint outcome feedback).
The results
The study´s results showed that the type of feedback received had a significant impact on participants’ perceptions of the scenario and on whether they behaved cooperatively or competitively:
- Strikingly, participants given ranking feedback perceived the cooperative scenario as competitive. As a result, they turned down guaranteed financial gains to ensure themselves a higher ranking, even though that ranking was financially irrelevant. They became increasingly competitive over the rounds played, to their own detriment.
- In contrast, participants given individual feedback behaved cooperatively in the cooperative scenario and increasingly selfishly in the competitive scenario over the rounds played.
- Participants who were given feedback on the performance of the group as a whole were generally interested in maintaining cooperation, regardless of the scenario.
In addition, managers and students showed similar patterns of behavior in the games. This shows that extensive experience with feedback and with cooperative and competitive situations – as experienced managers can be assumed to have accumulated – does not enable them to deal more constructively with such situations.
[This article has been reproduced with permission from IESE Business School. www.iese.edu/ Views expressed are personal.]
