What guides subjective performance evaluation: Incentive alignment or norm enforcement?

Autor(en): Gillenkirch, Robert M.
Kreienbaum, Heike
Stichwörter: APPRAISAL; BIAS; Business & Economics; DETERMINANTS; DISCRETION; Fairness; Incentive alignment; Management; MORAL HAZARD; Norm enforcement; PERCEIVED FAIRNESS; PERSPECTIVES; PREFERENCES; Subjective performance evaluation
Erscheinungsdatum: 2017
Herausgeber: SPRINGER HEIDELBERG
Journal: REVIEW OF MANAGERIAL SCIENCE
Volumen: 11
Ausgabe: 4
Startseite: 933
Seitenende: 957
Zusammenfassung: 
This paper investigates the objectives guiding a superior's subjective evaluation of subordinate performance. In a laboratory experiment, we implement a team production setting under uncertainty, where subordinates contribute to the organization's output by choosing effort levels, but individual contributions are subject to random shocks. After observing joint output, the superior can invest into additional (perfect or imperfect) information about effort levels. We test two competing hypotheses about objectives guiding a superior's subjective performance evaluation. The incentive alignment hypothesis states that the superior is guided by the objective to establish financial incentives that align a subordinate's preferences with the organization's goals such that it is in the subordinate's self-interest to provide effort. In contrast, the norm enforcement hypothesis states that the superior has a focus on subordinate behavior and wants to enforce the norm of cooperation by rewarding high and punishing low effort. Our results reject the incentive alignment hypothesis and provide support for the norm enforcement hypothesis.
ISSN: 18636683
DOI: 10.1007/s11846-016-0209-9

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