Social Conformity at Work: Evidence from a Field Experiment

Abstract

When a firm introduces relative performance feedback, workers may increase effort to signal high productivity to their peers and the firm. But social pressure to conform on productivity can decrease worker effort instead. I conduct a long-term field experiment at a sweater factory to disentangle the incentives underlying relative performance feedback using performance ranks. Treated workers receive ranks either privately or publicly. Private ranks do not affect productivity on average. But public ranks have a net negative effect. I show that this effect is driven by desire to signal social compatibility to the workers' social group. They reduce productivity if they outrank friends at baseline, but only when the ranks are visible to coworkers. Additional evidence is consistent with workers having a strong preference for social conformity. Novel data on cooperation show that the ranking contest also decreases cooperation among workers in general and has a further dampening effect on productivity.