Peer Evaluation: Incentives and Co-Worker Relations

Sol, Joeri

doi:10.2139/ssrn.1618655

“…Altruism and spite lead peers to internalize part of their co-workers'well-being, which implies that peers have an incentive to bias performance evaluations. Sol (2010) shows that the principal can ensure truthful peer evaluations by reducing the bonus tied to a positive evaluation, which is sometimes found to be optimal in the present analysis as well. Sol (2010) also shows that if peer evaluation becomes severely constrained because feelings of altruism or spite are strong, the principal optimally uses team incentives in addition to peer evaluation.…”

Section: Related Literaturesupporting

confidence: 55%

“…Finally, Sol (2010) studies the use of peer evaluations to incentivize employees, and allows peers to be altruistic or spiteful towards each other. Altruism and spite lead peers to internalize part of their co-workers'well-being, which implies that peers have an incentive to bias performance evaluations.…”

Section: Related Literaturementioning

confidence: 99%

Leniency Bias in Long-Term Workplace Relationships

Tichem

¹

2013

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper studies how …rms can e¢ ciently incentivize supervisors to truthfully report employee performance. To this end, I develop a dynamic principal-supervisor-agent model. The supervisor is either sel…sh or altruistic towards the agent, which is observable to the agent but not to the principal. The analysis yields two key results. First, supervisor altruism sometimes provides a net incentive to report performance truthfully, rather than to bias evaluations upward. The intuition is that an altruistic supervisor values his job because of his good relationship with the agent, and puts his job at risk by overrating the agent's performance. Second, I show that by screening for one supervisor type, …rms can incentivize the supervisor to truthfully report performance at the lowest possible costs. For this reason, screening may be optimal, even though it reduces the probability that vacancies are …lled. Terms of use: Documents in

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“…and Section 4, Sol (2010) has recently developed a theoretical model in which agents have superior information on the performance of co-workers. He analyzes how agents' preferences for truth-telling, their interpersonal relations to co-workers, and financial incentives influence the value of cheap-talk reporting systems for the principal.…”

Section: Discussionmentioning

confidence: 99%

Equity and Efficiency in Multi-Worker Firms: Insights from Experimental Economics

Abeler¹,

Altmann²,

Goerg

³

et al. 2011

Analyse &Amp; Kritik

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. In this paper, we discuss recent evidence from economic experiments that study the impact of social preferences on workplace behavior. We focus on situations in which a single employer interacts with multiple employees. Traditionally, equity and efficiency have been seen as opposing aims in such work environments: individual pay-for-performance schemes maximize efficiency but might lead to inequitable outcomes. We present findings from laboratory experiments that show under which circumstances partially incomplete contracts can create equitable work environments while at the same time reaching surprisingly efficient outcomes.JEL Classification: J33, D63, M52, C92, J41

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“…Dur and Sol (2010) discuss the influence of financial incentives on the work climate when agents do not only engage in productive activities, but also build up altruistic sentiments for their co-workers via social interaction in the workplace. Related to the topics discussed in Section 3 and Section 4, Sol (2010) has recently developed a theoretical model in which agents have superior information on the performance of co-workers. He analyzes how agents' preferences for truth-telling, their interpersonal relations to co-workers, and financial incentives influence the value of cheap-talk reporting systems for the principal.…”

Section: Discussionmentioning

confidence: 99%

Equity and Efficiency in Multi-Worker Firms: Insights from Experimental Economics

Abeler

¹

,

Altmann

²

,

Goerg

³

et al. 2011

SSRN Journal

0

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In this paper, we discuss recent evidence from economic experiments that study the impact of social preferences on workplace behavior. We focus on situations in which a single employer interacts with multiple employees. Traditionally, equity and efficiency have been seen as opposing aims in such work environments: individual pay-for-performance schemes maximize efficiency but might lead to inequitable outcomes. We present findings from laboratory experiments that show under which circumstances partially incomplete contracts can create equitable work environments while at the same time reaching surprisingly efficient outcomes.

show abstract

Peer Evaluation: Incentives and Co-Worker Relations

Cited by 5 publications

References 17 publications

Leniency Bias in Long-Term Workplace Relationships

Leniency Bias in Long-Term Workplace Relationships

Equity and Efficiency in Multi-Worker Firms: Insights from Experimental Economics

Equity and Efficiency in Multi-Worker Firms: Insights from Experimental Economics

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