The Benefits of Limited Feedback in Organizations
AbstractIn most ﬁrms, managers periodically assess workers performance. Evidence suggests that managers with hold information during these reviews, and some observers argue that this necessarily reduces surplus. This paper assesses the validity of this argument when workers have career concerns. Disclosure has two eﬀects: it exposes the worker to uncertainty about future eﬀort levels, but allows him to use current effort to inﬂuence his employers beliefs about future eﬀort. The surplus-maximizing disclosure policy reveals output realizations in the center of the distribution, but not in the tails. Thus, it is eﬃcient for ﬁrms to reveal some but not all performance information.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Barcelona Graduate School of Economics in its series Working Papers with number 490.
Date of creation: Jul 2010
Date of revision:
Performance Appraisal; Career Concerns; Incentives; Risk;
Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
- M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executives; Executive Compensation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- William Fuchs, 2005.
"Contracting with Repeated Moral Hazard and Private Evaluations,"
Game Theory and Information
- William Fuchs, 2007. "Contracting with Repeated Moral Hazard and Private Evaluations," American Economic Review, American Economic Association, vol. 97(4), pages 1432-1448, September.
- William Fuchs, 2005. "Contracting with Repeated Moral Hazard and Private Evaluations," Discussion Papers 04-012, Stanford Institute for Economic Policy Research.
- William Fuchs, 2005. "Contracting with Repeated Moral Hazard and Private Evaluations," 2005 Meeting Papers 431, Society for Economic Dynamics.
- Medoff, James L & Abraham, Katharine G, 1980.
"Experience, Performance, and Earnings,"
The Quarterly Journal of Economics,
MIT Press, vol. 95(4), pages 703-36, December.
- Ghazala Azmat & Nagore Iriberri, 2010.
"The Provision of Relative Performance Feedback Information: An Experimental Analysis of Performance and Happiness,"
454, Barcelona Graduate School of Economics.
- Ghazala Azmat & Nagore Iriberri, 2012. "The Provision of Relative Performance Feedback Information: An Experimental Analysis of Performance and Happiness," CEP Discussion Papers dp1116, Centre for Economic Performance, LSE.
- Ghazala Azmat & Nagore Iriberri, 2010. "The provision of relative performance feedback information: An experimental analysis of performance and happiness," Economics Working Papers 1216, Department of Economics and Business, Universitat Pompeu Fabra.
- Michael Waldman, 1984.
"Job Assignments, Signalling, and Efficiency,"
RAND Journal of Economics,
The RAND Corporation, vol. 15(2), pages 255-267, Summer.
- Alexander K. Koch & Eloïc Peyrache, 2008.
"Aligning Ambition and Incentives,"
Economics Working Papers
2008-16, School of Economics and Management, University of Aarhus.
- Koch, Alexander K. & Peyrache, Eloic, 2005. "Aligning Ambition and Incentives," IZA Discussion Papers 1527, Institute for the Study of Labor (IZA).
- Alexander K. Koch & Eloic Peyrache, 2005. "Aligning Ambition and Incentives," Royal Holloway, University of London: Discussion Papers in Economics 05/03, Department of Economics, Royal Holloway University of London, revised Mar 2005.
- Florian Ederer, 2010. "Feedback and Motivation in Dynamic Tournaments," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(3), pages 733-769, 09.
- Arijit Mukherjee, 2008. "Career Concerns, Matching, And Optimal Disclosure Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1211-1250, November.
- Masaki Aoyagi, 2003.
"Information Feedback in a Dynamic Tournament,"
ISER Discussion Paper
0580, Institute of Social and Economic Research, Osaka University.
- Beno�t S.Y. Crutzen & Otto H. Swank & Bauke Visser, 2007. "Confidence Management: On Interpersonal Comparisons in Teams," Tinbergen Institute Discussion Papers 07-040/1, Tinbergen Institute.
- Leonardo Martinez, 2006. "Reputation and Career Concerns," 2006 Meeting Papers 853, Society for Economic Dynamics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bruno Guallar).
If references are entirely missing, you can add them using this form.