Contests and unethical behavior in organizations: a review and synthesis of the empirical literature
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Contests and unethical behavior in organizations: a review and synthesis of the empirical literature Simon Piest1 · Philipp Schreck1 Received: 1 July 2019 / Accepted: 14 September 2020 © The Author(s) 2020
Abstract Contests are widely used in business contexts because they are believed to increase the effort and performance levels of employees. One negative aspect of contests is that they may provide incentives for unethical behavior aimed at improving one’s own position relative to that of competitors. It is therefore important to understand how companies should design contests so as to reduce unethical behavior without reducing the positive effects of contests on employee effort. Research from the social and behavioral sciences can offer relevant insights on this question, as in those fields competition is a subject of sustained academic interest. The aim of this review is to offer a systematic account of the growing literature on contests and unethical behavior and shed light on why and when contests among employees may lead to unethical behavior. To this aim, we also develop a framework for organizing the vast, multi-disciplinary literature in a structured and integrative manner. Through this endeavor, our review identifies several directions for future research. Keywords Behavioral business ethics · Cheating · Competition · Competitiveness · Sabotage · Tournament JEL Classification M12 · M14 · M52
1 Unethical behavior in contests Many organizations run internal contests in order to induce competition among their employees. They often do this because the incentives associated with competition are believed to increase motivation, effort, and performance (Dechenaux et al. * Simon Piest [email protected]‑halle.de Philipp Schreck [email protected]‑halle.de 1
School of Law and Economics, Martin-Luther-University Halle-Wittenberg, Halle (Saale), Germany
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2015; Lazear and Rosen 1981). These contests can take many forms. For example, employees compete for bonuses in sales contests (Brown et al. 1998), for promotion (Dechenaux et al. 2015; Lazear and Rosen 1981), or for symbolic awards (Charness et al. 2014). Similarly, many organizations “gamify” tasks in order to conduct performance comparisons within a peer-group (Reeves and Read 2013; Werbach and Hunter 2012). Experimental research shows that organizational contests can increase the effort and performance of employees. For example, there is evidence that tournament payschemes have strong effects on performance (Delfgaauw et al. 2013; Gneezy et al. 2003; Harbring and Irlenbusch 2003). Recent findings from laboratory and field experiments demonstrate that rankings can boost employee performance even when the ranks are not associated with monetary gains (Azmat and Iriberri 2010; Blanes et al. 2011; Hannan et al. 2008; Kuhnen and Tymula 2012; Tafkov 2013; Tran and Zeckhauser 2012). The desirable effects of contests are no doubt a main reason why organizations use contests so extensively. However, cont
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