'Good job!' The impact of positive and negative feedback on performance

TL;DR

This study investigates how positive and negative feedback influence professional performance, revealing that positive feedback improves future performance while negative feedback has no significant effect, across various environments and demographics.

Contribution

The paper provides causal evidence on the differential effects of positive and negative feedback on performance using quasi-random variation in subjective ratings.

Findings

Positive feedback enhances subsequent performance.

Negative feedback does not significantly affect performance.

Results are consistent across different environments and demographic groups.

Abstract

We analyze the causal impact of positive and negative feedback on professional performance. We exploit a unique data source in which quasi-random, naturally occurring variations within subjective ratings serve as positive and negative feedback. The analysis shows that receiving positive feedback has a favorable impact on subsequent performance, while negative feedback does not have an effect. These main results are found in two different environments and for distinct cultural backgrounds, experiences, and gender of the feedback recipients. The findings imply that managers should focus on giving positive motivational feedback.