What sparked your curiosity?

In today’s world of global talent shortages, firms invest billions in upskilling their workforce to stay competitive. Yet many employees still choose not to participate in firm-offered training, even when the training clearly benefits their own development. We wanted to understand why. Specifically, we asked ourselves whether existing management controls that are designed to motivate short-term effort, such as performance ranking, could be part of the explanation. While these rankings are designed to motivate employees to work harder, could they also make employees short-sighted, focusing on immediate performance at the expense of developing skills for the future?

What did you discover?

We found that performance rankings can encourage or discourage employees from taking training, depending on how training is organised. When training takes place during regular working hours or busy periods, rankings make employees less likely to participate in training because they focus on protecting their current standing and overlook the future benefits of training. In contrast, when training is offered outside regular hours or during downtime at work, rankings encourage employees to participate in training, as they see it as an opportunity to improve their future performance without compromising their current ranking. In other words, the same management control can have opposite effects depending on the context.

Why do these findings matter?

Our study shows that controls designed to motivate short-term performance can have unintended consequences for long-term skill development. For firms competing in a knowledge-driven economy, this has important implications: to get the most out of their training investments, firms need to recognise how the design of control systems and employee development systems is interconnected. When designed thoughtfully, firms can foster both short-term performance and long-term skill development, without forcing employees to choose between the two.

Literature:

Arnold, M. C., Shi, B., Tafkov, I. D., & Voermans, E. (2025). The Effects of Relative Performance Information and Work-Training Tradeoff on Employees’ Skill Development: An Experimental Investigation. The Accounting Review, 100(3), 35-58.