The Effect of Relative Performance Information on Creative Problem-Solving Performance

ABSTRACT

Despite the frequent use of relative performance information (RPI) feedback in practice, there is a paucity of research on the extent to which discretionary use of RPI can influence employees’ creative problem-solving performance. Using the experimental method, we study how variations in the completeness of public RPI affect individual performance on an insight task. We consider three levels of RPI completeness: complete, partial, and none. In complete RPI, all employees’ performance is ranked and publicly disclosed; in partial RPI, only top-ranking employees are publicly announced; and in no RPI, no ranking feedback is provided. Drawing on regulatory focus theory, we expect and find that partial RPI leads to higher creative problem-solving performance than complete RPI or no RPI at all. Implications for creative problem-solving and the RPI literature are discussed.

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JEL Classifications: M40; M41.