Complacency and Giving Up Across Repeated Tournaments: Evidence from the Field

Abstract

ABSTRACT Tournament incentive schemes involve individuals competing against each other for a single or limited number of rewards (e.g., promotion, bonus, pay raise). Although research shows tournament schemes can have positive effects on performance, there is also evidence of dysfunctional intra-tournament behavior by top performers (complacency) and weak performers (giving up). However, few studies have examined behavior in organizational settings, not uncommon in practice, where tournaments are conducted on a repeated basis. We predict that complacency and giving up will generalize to settings where individuals repeatedly compete in successive short-duration tournaments. We test our predictions using archival data from a reservation center of a major hotel chain that employs repeated four-week tournaments where performance does not carryover from one competition to the next. Results show top performers quickly become complacent in response to success in early tournaments. The lowest-performing losers in early tournaments eventually appear to give up, but additional analysis indicates they only do so after unsuccessfully changing task strategy. Our results contribute to a better understanding of individual behavior in settings where individuals repeatedly compete against largely the same group of employees. Our evidence also suggests that tournaments are less effective at sustaining the motivation of the most capable performers and other approaches may be necessary.