Overperformance via the Lake Wobegon Effect
I conducted an informal experiment recently with my hardworking MBA students. The course required participation in weekly online discussion forums. Students generally posted to these forums twice each week—since this is what was spelled out by me as appropriate performance, in addition to quality parameters.
I asked students to imagine how often they might post if I had not specified a target number for their weekly contributions. Let’s say that I instead simply asked for frequent, quality posts. Personal projections ranged from 3 to 12 and averaged around 4 posts per week.
Next I directed student attention to the responses of the high achievers in the classroom. “Wow, it looks like Mary and John would be online posting to the discussion forum every morning and night. Has anyone revised their intended number of posts?” What I expected and found was a posting arms race.
Most people respond to ambiguity in performance evaluation standards with an increase in social comparison. How do my numbers compare to the others in my work group? This helps them reduce their uncertainty over what constitutes good performance. Construing performance in these relative terms in turn fuels a kind of Lake Wobegon ripple effect. That is, since most of us feel we are above average, our performance must also exceed the average of others we observe.
On the surface this may appear a manager’s dream. Employees work harder on their own accord and the bar keeps ratcheting upwards. Let’s all use vague performance standards!
In reality, overperformance may make sense for brief periods but it is not a sustainable practice. Investments that overperform (i.e., do better than the market) for an extended period of time generally create bubbles that eventually burst (think the housing market). What kind of manager (or professor) do you aim to be…one that sustains or bursts your human resources?

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