Same-Rank versus Multiple-Rank Employee Recognition: The Effect on Subsequent Motivation of Unrecognized Employees

Firms increasingly use employee recognition and disclose recognized performance to motivate employees. In this paper, we investigate how disclosed best performance interacts with recognition scope (same-rank versus multiple-rank recognition) in influencing the subsequent motivation of unrecognized lower-rank employees. We predict and find that a higher level of disclosed best performance from a recognized higher-rank employee in multiple-rank recognition motivates unrecognized lower-rank employees more in the subsequent period, compared to a higher level of disclosed best performance from a recognized peer in same-rank recognition. The results contribute to accounting research on employee recognition by identifying a potential benefit of including employees with different career stages in a recognition program to sustain employee motivation.