Social Preferences and the Informativeness of Subjective Performance Evaluations

David J. Kusterer () and Dirk Sliwka ()
Additional contact information
David J. Kusterer: Rotterdam School of Management, Erasmus University, 3062 PA Rotterdam, Netherlands
Dirk Sliwka: Faculty of Management, Economics, and Social Sciences, University of Cologne, 50923 Cologne, Germany

Management Science, 2025, vol. 71, issue 5, 4028-4048

Abstract: We study biases and the informativeness of subjective performance evaluations in an online experiment, testing the implications of a standard formal framework of rational subjective evaluations. In the experiment, subjects in the role of workers perform a real effort task. Subjects in the role of supervisors observe samples of the workers’ output and assess their performance. We conduct six experimental treatments varying (i) whether workers’ pay depends on the performance evaluation, (ii) whether supervisors are paid for the accuracy of their evaluations, and (iii) the precision of the information available to supervisors. Moreover, we use the exogenous assignment of supervisors to workers to investigate the association between supervisors’ social preferences and their rating quality. In line with the model of optimal evaluations, we find that ratings are more lenient and less informative when they determine bonus payments. Rewards for accuracy reduce leniency and can enhance informativeness. When supervisors have access to more detailed performance information, their ratings vary more with the performance signal and become more informative. Contrary to expectations, we do not find that more prosocial supervisors are systematically more lenient when their ratings affect workers’ payoffs. Instead, they are more diligent in their rating behavior, resulting in more accurate and informative performance evaluations.

Keywords: subjective performance evaluation; bias; bonuses; differentiation; social preferences (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.2022.02267 (application/pdf)

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:inm:ormnsc:v:71:y:2025:i:5:p:4028-4048

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().