Performance Feedback with Career Concerns

Stephen E. Hansen

The Journal of Law, Economics, and Organization, 2013, vol. 29, issue 6, 1279-1316

Abstract: This article examines the incentive effects of interim performance evaluation when a worker has career concerns and effort is history dependent. Disclosure has two effects: it increases the variance of future effort, and it allows the worker to use current effort to influence his employer's belief about future effort, creating a ratchet effect. The article provides necessary and sufficient conditions for full disclosure to dominate no disclosure; shows that the optimal disclosure policy reveals output realizations in the center of the distribution, but not in the tails; and discusses the potential implications of the results for the analysis of performance appraisal systems. (JEL D82, D86, L20) The Author 2012. Published by Oxford University Press on behalf of Yale University. All rights reserved. For Permissions, please email: journals.permissions@oup.com, Oxford University Press.

Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://hdl.handle.net/10.1093/jleo/ews032 (application/pdf)
Access to full text is restricted to subscribers.

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:oup:jleorg:v:29:y:2013:i:6:p:1279-1316

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The Journal of Law, Economics, and Organization is currently edited by Andrea Prat

More articles in The Journal of Law, Economics, and Organization from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().