The Complementary Use of Experiments and Field Data to Evaluate Management Practices: The Case of Subjective Performance Evaluations

Kampkötter, Patrick; Sliwka, Dirk

doi:10.1628/093245616x14545727832367

Cited by 20 publications

(11 citation statements)

References 81 publications

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“…From a superior's perspective, it may be situationally rational to provide biased rewards. For instance, leniency bias may occur because the superior cares about the well-being of his subordinates or intends to avoid costs arising out of negative evaluations (Frederiksen et al 2017;Kampkötter and Sliwka 2016). A lower differentiation of evaluations, as implied by centrality bias, may result from a superior's inequality aversion or imprecise signals regarding the subordinates' individual performance.…”

Section: Introductionmentioning

confidence: 99%

The psychological effects of centrality bias: an experimental analysis

Trapp

2018

J Bus Econ

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This paper examines the psychological mechanisms that are activated by centrality bias in the context of subjective performance evaluation. Centrality bias refers to compressed evaluations of subordinates, implying that the variance in the performance of the evaluated employees is higher than the variance in the rewards determined by the superior. Based on insights from the social psychology literature, we argue that centrality bias may trigger different psychological mechanisms which affect the subordinates' willingness to exert work effort. We propose that these effects differ depending on whether employees are above-average or below-average performers. In line with our predictions, we detect a considerable asymmetry in the effects of centrality bias. In particular, we find that the relationship between centrality bias and the willingness to exert work effort is negatively mediated by controlled motivation and procedural fairness perceptions for above-average performers. For below-average performers, we find that centrality bias is positively related to procedural fairness perceptions which are, however, unrelated to the willingness to exert work effort. In addition, we shed light on the role of peer information and find that its disclosure has not a significant impact on the psychological mechanisms at work.

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Section: Introductionmentioning

confidence: 99%

The psychological effects of centrality bias: an experimental analysis

Trapp

2018

J Bus Econ

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“…We include a dummy equal to 1 if the firm uses performance appraisals and recommends a predetermined distribution of ratings that evaluators have to follow. Recommended distributions are adopted to ensure more differentiation among employees (Kampkoetter and Sliwka ). The variable for performance appraisals is available for both managerial and non‐managerial employees.…”

Section: Data and Variablesmentioning

confidence: 99%

Performance Pay and Applicant Screening

Jirjahn

Mohrenweiser

2018

Brit J Industrial Rel

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Using German establishment data, we show that the relationship between intensity of individual-based performance pay and intensity of applicant screening depends on the nature of production. In establishments with increased multitasking, performance pay is positively associated with applicant screening. By contrast, in establishments without increased multitasking, performance pay is negatively associated with applicant screening. We do not find a similar pattern of results for group-based performance pay or profit-sharing. Our findings fit the hypothesis that individual-based performance pay induces a positive self-sorting of employees if jobs are less multifaceted. In this case, employers with a high intensity of performance pay do not need intensive applicant screening to ensure a high quality of matches between workers and jobs. However, if jobs are more multifaceted, individual-based performance pay can entail problems of adverse self-sorting. In order to mitigate or overcome these problems, employers making intensive use of performance pay also screen applicants more intensively.

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“…For example, behavioural economics research shows that fairness and inequality aversion plays an important role for performance evaluation by managers (e.g. Kampkötter & Sliwka, 2016). In general, behavioural economics research findings prove to be well reproducible.…”

Section: Behavioural Economics In Organisationsmentioning

confidence: 99%

Human Resource Management and Nudging: An Experimental Analysis on Goal Settings in German Companies

Grunewald¹,

Hammermann²,

Placke³

2017

IJEF

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We analyse how human resource managers and directors in German companies can become aware of the application of incentive systems like goalsetting and performance-based pay. In particular, we analyse to what extent a nudge can increase the interest of experts in goalsetting and performance-based pay. The nudge consists of giving information concerning the diffusion rate of goalsetting and performance-based pay, as well as the potential productivity increase. In fact, surveyed HR managers who received the information reported a higher interest in goalsetting and performance-based pay compared to the control group of HR managers without such information. Furthermore, the study showed a consistent answering behaviour between statements about intended activities with the performance management and statements about the actual implementation one year later.Keywords: behavioural economics, human resources, managers, compensation Behavioural Economics in OrganisationsDuring the last thirty years, business sciences have expanded their research methods and objects of investigation by insights from other domains like psychology, sociology and neurology. One important insight for managers in companies is that people are much more often guided and influenced by emotions and external factors than had been assumed so far. For example, behavioural economics research shows that fairness and inequality aversion plays an important role for performance evaluation by managers (e.g. Kampkötter & Sliwka, 2016). In general, behavioural economics research findings prove to be well reproducible. Camerer et al. (2016) conducted worldwide replications from particularly well-known behavioural economics studies, with the result that 78 percent of the research findings could be replicated and the rest of the findings just shortly missed the level of significance.Behavioural economics expands standard economic theory with psychological factors. For example, the suggestion that a human implements all available information in his decision making could not be proven by various studies (e.g. Altmann et al., 2011). In fact, in the face of cognitive limitations, he will concentrate on fewer pieces of particularly important information. Not just marketing experts take advantage of this phenomenon; election researchers also use it to motivate non-voters. For instance, Gerber and Rogers (2009) informed US citizens about the high voter participation during the last election and showed that the voter participation of these citizens was on average three percent higher compared to citizens who did not get such information. This information has this effect because most people are interested in the behaviour and activities of others and seek to imitate it. This is called herding behaviour.In this study, herding behaviour will be analysed as a causing channel of the behavioural economics treatment with human resource managers and directors, who will be called -HR-managers‖ in what follows. HR managers are a particularly interesting group to study beca...

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The Complementary Use of Experiments and Field Data to Evaluate Management Practices: The Case of Subjective Performance Evaluations

Cited by 20 publications

References 81 publications

The psychological effects of centrality bias: an experimental analysis

The psychological effects of centrality bias: an experimental analysis

Performance Pay and Applicant Screening

Human Resource Management and Nudging: An Experimental Analysis on Goal Settings in German Companies

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