The Effects of Public RPI and Public Goals on Performance

ABSTRACT Recent studies find public relative performance information (RPI) may reduce performance. A common thread in these studies is the presence of other public information besides public RPI. We contribute to this line of research by demonstrating that the effects of public RPI on performance are weaker when employees set public performance goals than when they do not set any performance goals. We theorize this attenuating effect occurs because public RPI facilitates social comparisons between participants’ goals and their performance, and participants who set public performance goals seek to be known as goal attainers and garner favorable status in the eyes of their peers. Consistent with our theory, we find public RPI leads participants to set easier public performance goals and to be more likely to attain them. Collectively, these results reinforce the need for firms to consider what other information is made public when providing public RPI. Data Availability: Data are available from the authors upon request.