Productivity under Hostility

Abstract

Workplace culture is a well-established driver of long-term organizational success. Using a controlled experiment, we explore whether hostile work environments impact individual and group performance. Participants are randomly assigned to groups with varying gender composition, where they complete rounds of quizzes. In each round, group members decide whether to nominate their own performance to count toward the group’s payoff. The work environment is manipulated to be either friendly or unfriendly through pre-specified messages that group members can send to one another after each round. Our results show that individuals who work in a hostile and majority-men team earn less. While we find suggestive evidence that women perform below their team average under hostility, payoff differences are explained by gender differences in nomination decisions. Men tend to make suboptimal nomination decisions under hostility, in particular by being over-confident in their own nomination. Using an incentive-compatible choice experiment, we find that the experience of hostile interactions increases the willingness- to-pay for other non-wage amenities for male respondents.