Does Real-Time Feedback Matter? A Simulation Study to Link Individual and Organizational Performance

Organizations are utilizing real-time feedback applications as a means to enable and facilitate a feedback environment that enhances employee performance. Extant studies have focused on individual feedback effects, but organizational effects are not well addressed in literature, especially as it relates performance. We investigate how different feedback configurations have an effect on organizational performance through an agent-based simulation. We find that when providing feedback, it is more important to have a combination of medium values for specificity and valence than the one extreme over the other. Furthermore, the greater the time feedback managers invest in the feedback process, the greater the benefit for the overall organization. However, this comes with costs, since providing feedback is not the only task of a manager. Lastly, in environments with high complexity tasks, any feedback even if it is medium on specificity and contains only a limited amount of positivity results in higher payoffs.