Multi-Rater Performance Evaluations and Incentives

Axel Ockenfels, Dirk Sliwka () and Peter Werner
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Dirk Sliwka: University of Cologne

No 16812, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We compare evaluations of employee performance by individuals and groups of supervisors, analyzing a formal model and running a laboratory experiment. The model predicts that multi-rater evaluations are more precise than single-rater evaluations if groups rationally aggregate their signals about employee performance. Our controlled laboratory experiment confirms this prediction and finds evidence that this can indeed be attributed to accurate information processing in the group. Moreover, when employee compensation depends on evaluations, multi-rater evaluations tend to be associated with higher performance.

Keywords: performance appraisal; calibration panels; group decision-making; real effort; incentives (search for similar items in EconPapers)
JEL-codes: J33 M52 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2024-02
New Economics Papers: this item is included in nep-exp, nep-hrm and nep-lma
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Working Paper: Multi-rater Performance Evaluations and Incentives (2024)
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