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Subjectivity in Professionals' Incentive Systems: Differences between Promotion‐ and Performance‐Based Assessments

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  • Jasmijn C. Bol
  • Justin Leiby

Abstract

We examine how managers assess performance and promotion prospects—that is, the ex ante likelihood of promotion—and the conditions under which these assessments diverge. We argue that managers apply different cognitive schemas when they make different assessments. To the extent that a signal provides different information about future versus current contributions, assessed performance and promotion prospects are likely to diverge. In two experiments, we manipulate professionals' promotion eligibility and level of consultative decision making. We find that experienced managers assess performance and promotion prospects differently, but only when professionals are promotion eligible. Specifically, more (as opposed to less) consultative decision making decreases promotion prospects while not affecting assessed performance (Experiment 1) or even improving it (Experiment 2). By contrast, more consultative decision making improves both assessments when professionals are not eligible for promotion. We shed light on the relations between subjective assessments, including that promotion is not necessarily the consequence of superior assessed performance. Les auteurs analysent la façon dont les gestionnaires procèdent à l'évaluation du rendement et à celle des perspectives de promotion — soit la probabilité de promotion a priori — ainsi que les circonstances dans lesquelles ces évaluations divergent. Ils soutiennent que les gestionnaires adoptent des schémas cognitifs différents lorsque leurs évaluations ont des fins différentes. Dans la mesure où un signal livre de l'information différente au sujet des apports futurs d'un sujet comparativement à ses apports présents, l'évaluation du rendement et celle des perspectives de promotion sont susceptibles de diverger. Les auteurs mènent deux expériences dans lesquelles ils manipulent l'admissibilité de professionnels à une promotion et l'importance de leur recours à la consultation dans leur processus décisionnel. Ils constatent que les gestionnaires expérimentés évaluent le rendement et les perspectives de promotion différemment, mais uniquement lorsque les professionnels évalués sont admissibles à une promotion. Concrètement, un processus décisionnel plus consultatif (par opposition à un processus décisionnel qui l'est moins) diminue les perspectives de promotion sans avoir d'incidence sur l'évaluation du rendement (première expérience), voire même en améliorant l'évaluation du rendement (seconde expérience). En revanche, un processus décisionnel plus consultatif améliore à la fois l'évaluation du rendement et celle des perspectives de promotion lorsque les professionnels évalués ne sont pas admissibles à une promotion. Les auteurs jettent un éclairage sur les relations entre les évaluations subjectives, en soulignant notamment le fait que la promotion n'est pas nécessairement l'issue d'une évaluation du rendement supérieure.

Suggested Citation

  • Jasmijn C. Bol & Justin Leiby, 2018. "Subjectivity in Professionals' Incentive Systems: Differences between Promotion‐ and Performance‐Based Assessments," Contemporary Accounting Research, John Wiley & Sons, vol. 35(1), pages 31-57, March.
  • Handle: RePEc:wly:coacre:v:35:y:2018:i:1:p:31-57
    DOI: 10.1111/1911-3846.12393
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    Cited by:

    1. Lisa-Marie Wibbeke & Maik Lachmann, 2020. "Psychology in management accounting and control research: an overview of the recent literature," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(3), pages 275-328, September.
    2. van Rinsum, M., 2019. "Utilizing Incentives and Accountability: In Control in Control?," ERIM Inaugural Address Series Research in Management EIA 2019-078-F&A, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam..

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