Locus of Control and Performance Appraisal

John Heywood, Uwe Jirjahn and Cornelia Chadi

No 10288, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This work contributes to the literature demonstrating an important role for psychological traits in labor market decisions. We show that West German workers with an internal locus of control sort into jobs with performance appraisals. Appraisals provide workers who believe they control their environment a tool to demonstrate their value and achieve their goals. We confirm that workers who are risk tolerant also sort into jobs with performance appraisals but explain why the influence of the locus of control and risk tolerance should not be additive. We demonstrate this by estimating a routinely large and significantly negative interaction in our sorting equations. We also show that important patterns of sorting are revealed only when taking into account the interaction of locus of control and risk tolerance.

Keywords: extrinsic rewards; sorting; performance pay; performance appraisal; risk attitude; locus of control; intrinsic motivation (search for similar items in EconPapers)
JEL-codes: D03 J33 M52 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2016-10
New Economics Papers: this item is included in nep-cbe, nep-hrm, nep-lma and nep-neu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - revised version published in: Journal of Economic Behavior and Organization, 2017, 142, 205-225

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Related works:
Journal Article: Locus of control and performance appraisal (2017)
Working Paper: Locus of Control and Performance Appraisal (2016)
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