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

Robert M. Gillenkirch () and Heike Kreienbaum ()
Additional contact information
Robert M. Gillenkirch: University of Osnabrück
Heike Kreienbaum: University of Osnabrück

Review of Managerial Science, 2017, vol. 11, issue 4, No 7, 933-957

Abstract: Abstract 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.

Keywords: Subjective performance evaluation; Norm enforcement; Incentive alignment; Fairness (search for similar items in EconPapers)
JEL-codes: M41 M52 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s11846-016-0209-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:rvmgts:v:11:y:2017:i:4:d:10.1007_s11846-016-0209-9

Ordering information: This journal article can be ordered from
http://www.springer.com/business/journal/11846

DOI: 10.1007/s11846-016-0209-9

Access Statistics for this article

Review of Managerial Science is currently edited by R. Ewert and W. Kürsten

More articles in Review of Managerial Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().