IDEAS home Printed from https://ideas.repec.org/a/oup/jleorg/v29y2013i1p35-59.html
   My bibliography  Save this article

Subjective Performance Evaluations, Collusion, and Organizational Design

Author

Listed:
  • Veikko Thiele

Abstract

Many scholars have emphasized the importance of subjective performance evaluations in employment relationships to provide employees with effort incentives. This article examines when delegating subjective appraisals to managers is optimal. Delegation facilitates more accurate performance evaluations but can also lead to collusion. To prevent collusive behavior, I show that firms need to reduce effort incentives for employees and leave managers with economic rents through higher compensations. Despite these costs of preventing collusion, I find that delegation can be optimal. The Author 2011. Published by Oxford University Press on behalf of Yale University. All rights reserved. For Permissions, please email: journals.permissions@oup.com, Oxford University Press.

Suggested Citation

  • Veikko Thiele, 2013. "Subjective Performance Evaluations, Collusion, and Organizational Design," Journal of Law, Economics, and Organization, Oxford University Press, vol. 29(1), pages 35-59, February.
  • Handle: RePEc:oup:jleorg:v:29:y:2013:i:1:p:35-59
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/jleo/ewr021
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marchegiani, Lucia & Reggiani, Tommaso & Rizzolli, Matteo, 2016. "Loss averse agents and lenient supervisors in performance appraisal," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 183-197.
    2. Maggian, Valeria & Montinari, Natalia & Nicolò, Antonio, 2015. "Backscratching in Hierarchical Organizations," Working Papers 2015:10, Lund University, Department of Economics.
    3. Jan Tichem, 2013. "Leniency Bias in Long-Term Workplace Relationships," Tinbergen Institute Discussion Papers 13-196/VII, Tinbergen Institute.
    4. repec:bla:scandj:v:119:y:2017:i:2:p:295-311 is not listed on IDEAS
    5. Delfgaauw, Josse & Souverijn, Michiel, 2016. "Biased supervision," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 107-125.
    6. Matthias Kräkel, 2017. "Authority and Incentives in Organizations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(2), pages 295-311, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:jleorg:v:29:y:2013:i:1:p:35-59. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: https://academic.oup.com/jleo .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.