Have you ever been in a situation where you were inspired to work harder because of a teammate or co-worker? Or felt nervous because you were worried about looking bad when compared to those around you?
If you are like most people, the answer to these questions is yes. Whether we think we are doing a good job is directly influenced by the performance of those around us. The performance of our peers also influences how well we perform ourselves. Research on this concept is presented below along with tips for considering peer influence in the context of performance management.
People work in groups. Yet many companies’ talent management methods are designed as though people worked in isolation. These methods do not actively consider how co-workers impact each other’s performance when evaluating employees and making staffing decisions. They are frequently designed as though an individual’s performance is solely due to their own actions and ignore the fact that we are social beings whose work influences, and is influenced by the work of those around us.
The importance of managing employee performance in a way that accounts for both individual behavior and social influences comes from decades of research on “social comparison theory.” This research has led to several empirical findings that have direct relevance to talent management practices, particularly in the context of performance management.
Social comparison theory was largely built on Leon Festinger’s original work in the 1950s that showed we compare ourselves to those around us to establish how we are doing. These comparisons can be made about our attractiveness, self-worth, performance, or ability and can ultimately affect how we behave and interact with others.
Research on social comparison theory shows that when we are around peers who are doing worse than us, we attribute our higher performance to a stronger personal ability. But, if our peers are doing better than us, we attribute our underperformance to something other than our ability, such as bad luck.
Furthermore, the performance of people we work with directly is more influential on employee performance than average organizational performance data, meaning peer groups matter a lot more than company averages. This creates both a risk and opportunity of local teams getting better or worse over time due to differences in member performance. Having higher performing employees work alongside lower performing co-workers or teammates may improve people’s performance expectations and increase overall team performance.
Here are two way to use social comparison effectively:
While there can be value in mixing higher and lower performing employees, it can also create risks. Social comparison also indicates that our peers influence us in both positive and negative ways. For example, simply working close to someone who is a high performer or has high status within the company can motivate an employee to do better on their own work tasks, even when the two employees are not part of the same team or work group. In other words, when working alongside a high performer, employees’ performance tends to improve.
However, when someone performs to compete with a high performer, that person’s performance tends to decline. This suggests that people are inspired by high performers, but intimated if they feel like they are being compared against them. When employees are inspired, they can model their behavior based on what they see works well for high status or high performing employees. This supports the idea that organizations should frame goals and tasks in such a way that emphasizes collaboration over competition. For example, rewards should not be given out in a way so only a few people can win and everyone else loses. It should be possible for everyone to be equally successful, even if it is unlikely.
Social performance theory can also help guide how companies evaluate employee performance. This was covered in detail in a recent article by Steve Hunt discussing the concept of social performance management (SPM).
SPM focuses on managing individual employees as part of a larger group. Other performers who are better or worse than us inherently guide performance. To maximize performance and development, employee assessments should be based on both individual performance and how they are influenced by the performance of those working around them. More specifically, methods of employee evaluations should consider how performance is influenced by peers by categorizing employees into specific performance groups. This categorization is ideally done through calibration sessions in which managers rank employees based on observable behaviors in multiple contexts, including social ones in which peer influence occurs.
Decades of research related to social comparison theory has demonstrated that it is crucial to understand performance as a social concept. Companies should not manage employee performance based on an individual’s behavior while ignoring how that behavior is partially caused and influenced by the behavior of his or her peers. Assessing performance of people in isolation without considering the performance of their co-workers ignores well established truths about the social nature of human behavior. It is also important to ensure comparisons among employees are done in a constructive, non-competitive fashion, focusing on qualitative discussion instead of numerical rankings.
If companies want to create high performing employees and work groups, they need to manage individuals recognizing that how we act is due in part to the actions of others.
