Symbolic Awards at Work: A Regression Discontinuity Design

Abstract：  

This paper studies the effects of a non-pecuniary symbolic award on winners, losers, and their peers, using a regression discontinuity design. We identify newly recruited insurance salespeople who barely won a quarterly “Best Rookie” award and their counterparts who barely missed it in a large insurance company.  Our main finding is that barely winners earn less life insurance commission than barely losers in the quarter following the award designation. Interestingly, the performance difference is mainly driven by winners earning less rather than losers’ earning more. Several mechanisms, such as signaling, effort reallocation, licensing, mean reversion, conformity preference, and strategic reallocation across time or across teammates, are tested and ruled out. One mechanism, which we have empirical support for, is peer sabotage of winners triggered by the award designation. Finally, we examine spillover effects of the award and find no evidence that coworkers of winners and losers perform differently in any measurable aspects after the award.

Speaker Biography： 

Teng Li is Associate Professor in the International School of Business and Finance and fellow of Institute of Advanced Finance at the Sun Yat-sen University. His research fields include labor, personnel, and environmental economics. His primary research interests are (1) monetary and non-monetary incentives and worker productivity, (2) finance wealth and job performance, and (3) consequences of environmental factors such as air pollution and high temperatures. His work appears in Journal of Environmental Economics and Management and Regional Science and Urban Economics. He holds a Ph.D. in economics from National University of Singapore.