LAUSR

In this paper, we experimentally investigate how goal setting and feedback policies affect work performance. In particular, we study the effects of (i) absolute performance feedback, (ii) self-specified goals, and (iii) exogenous goals and relative performance feedback. Our results show that the average performance of the subjects who are provided self-performance feedback is 11% lower than the ones who obtain no feedback. Moreover, setting a non-binding personal goal does not affect performance. Finally, assigning an exogenous goal and providing relative performance feedback decreases performance by 8%. We discuss the insights our findings offer for the optimal design of goal setting and feedback mechanisms. Copyright © 2015 John Wiley & Sons, Ltd.