Seeing Where You Stand: From Performance Feedback to Performance Transparency

Abstract

Advanced technology is enabling organizations to continuously track employee activities, generating and reporting transparent performance data that increasingly replace traditional manager-led performance feedback reviews. Using a field experiment at a large service organization, we examine the effect of replacing performance feedback reviews with system-generated transparent performance data on employees’ productivity. Consistent with prior theory, we find a positive effect of transparent performance data on productivity, but it is driven by employees avoiding the least productive behaviors rather than increasing the most productive ones. We also investigate two novel relational moderators of the relationship between transparent performance data and productivity–supervisor support (vertical relation) and social comparison orientation (horizontal relation)–which we believe are understudied, given their increased importance in more transparent performance environments. We find that both moderate the positive effect: employees with low supervisor support and low social comparison orientation benefit most from transparent performance data, suggesting that it acts as a substitute for both managers and informal social comparison. We discuss the implications for theory and for the practice of designing transparent feedback systems.