More companies are sharing employee performance data among staff, hoping it will motivate people to improve. The idea is simple: when workers see how they stack up against their colleagues, they’ll reflect on their own work and make smarter choices. But is this approach actually effective? A new study from HEC Paris suggests it might not be so straightforward.
In the study, participants were shown how a colleague performed compared to the average. Some were told about a high performer, others about a low performer. The point wasn’t to rank workers or hand out rewards and punishments. Instead, it was to help participants assess their own performance and decide if they should change how they work.
The hope, say the researchers, is that those underperforming will take the feedback as a chance to improve. But the results show that most people stick to their usual habits, regardless of the data. “That can be good if you’re aiming for efficiency,” the authors note. “But if you want fresh ideas and innovation, it can hold you back.”
Why Don’t People Change?
Top performers rarely see a need to change—they’re already doing well. But what about underperformers? Instead of using the feedback to improve, many ignored it or spun it in a positive light to protect their self-esteem.
This behavior, the researchers explain, comes from a tendency called “self-enhancement.” People like to see themselves in a good light, so they focus on small wins—like improving slightly over time—even if they’re still behind their peers. While this mindset can keep morale up, it often blocks real progress.
The Risks of Sharing
Does this mean companies should stop sharing performance data? Not at all. Done right, it can help employees make better decisions. The key is in how the information is presented.
Sharing data in ways that embarrass workers or fuel competition can do more harm than good. Top performers may grow complacent, while others might become defensive or avoid taking risks. Over time, this can stifle creativity and exploration across the company.
To use performance data effectively, companies need to create the right environment. Feedback should be given privately, so employees can reflect without feeling judged. The workplace should also emphasize collaboration rather than cutthroat competition.
When handled with care, sharing performance data can empower workers to improve on their own terms, without micromanagement. It can also spark the innovation needed to keep a business thriving.
The takeaway? Transparency is a powerful tool, but only if paired with thoughtful leadership and a supportive culture.
