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Social Ties and Subjective Performance Evaluations: An Empirical Investigation

Author

Listed:
  • Breuer, Kathrin

    () (University of Cologne)

  • Nieken, Petra

    () (University of Bonn)

  • Sliwka, Dirk

    () (University of Cologne)

Abstract

We empirically investigate possible distortions in subjective performance evaluations. A key hypothesis is that evaluations are more upward biased the closer the social ties between supervisor and appraised employee. We test this hypothesis with a company data set from a call center organization which contains not only subjective assessments but also several more objective measures of performance. Controlling for these performance measures, we find strong evidence that evaluations are upwards biased in smaller teams and some evidence that supervisors give better ratings to employees they themselves have evaluated before.

Suggested Citation

  • Breuer, Kathrin & Nieken, Petra & Sliwka, Dirk, 2010. "Social Ties and Subjective Performance Evaluations: An Empirical Investigation," IZA Discussion Papers 4913, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4913
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    References listed on IDEAS

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    1. Klaus Abbink & Bernd Irlenbusch & Elke Renner, 2006. "Group Size and Social Ties in Microfinance Institutions," Economic Inquiry, Western Economic Association International, vol. 44(4), pages 614-628, October.
    2. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
    3. Prendergast, Canice & Topel, Robert H, 1996. "Favoritism in Organizations," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 958-978, October.
    4. Moers, Frank, 2005. "Discretion and bias in performance evaluation: the impact of diversity and subjectivity," Accounting, Organizations and Society, Elsevier, vol. 30(1), pages 67-80, January.
    5. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 811-846.
      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
    6. Prendergast, Canice & Topel, Robert, 1993. "Discretion and bias in performance evaluation," European Economic Review, Elsevier, vol. 37(2-3), pages 355-365, April.
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    Cited by:

    1. Bos, Jaap W.B. & Degl'Innocenti, Marta, 2017. "Banking on industry: the impact of financial services on regional industrial structure and development," Research Memorandum 009, Maastricht University, Graduate School of Business and Economics (GSBE).
    2. Rosaz, Julie & Villeval, Marie Claire, 2012. "Lies and biased evaluation: A real-effort experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 537-549.
    3. Alexander Sebald & Markus Walzl, 2014. "Subjective Performance Evaluations and Reciprocity in Principal–Agent Relations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 116(2), pages 570-590, April.
    4. Collewet, Marion & Sauermann, Jan, 2017. "Working hours and productivity," Labour Economics, Elsevier, vol. 47(C), pages 96-106.
    5. Sauermann, Jan, 2015. "Worker Reciprocity and the Returns to Training: Evidence from a Field Experiment," IZA Discussion Papers 9179, Institute for the Study of Labor (IZA).
    6. Delfgaauw, Josse & Souverijn, Michiel, 2016. "Biased supervision," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 107-125.
    7. Andries De Grip & Jan Sauermann, 2012. "The Effects of Training on Own and Co‐worker Productivity: Evidence from a Field Experiment," Economic Journal, Royal Economic Society, vol. 122(560), pages 376-399, May.
    8. Patrick Kampkötter & Dirk Sliwka, 2016. "The Complementary Use of Experiments and Field Data to Evaluate Management Practices: The Case of Subjective Performance Evaluations," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 172(2), pages 364-389, June.
    9. Uwe Jirjahn & Erik Poutsma, 2013. "The Use of Performance Appraisal Systems: Evidence from Dutch Establishment Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(4), pages 801-828, October.
    10. Igor Letina & Shuo Liu & Nick Netzer, 2017. "Delegating performance evaluation," ECON - Working Papers 266, Department of Economics - University of Zurich, revised Mar 2018.
    11. Christian Grund & Judith Przemeck, 2012. "Subjective performance appraisal and inequality aversion," Applied Economics, Taylor & Francis Journals, vol. 44(17), pages 2149-2155, June.
    12. Dey, Oindrila & Banerjee, Swapnendu, 2015. "Endogenous favouritism with status incentives: A model of optimum inefficiency," MPRA Paper 62828, University Library of Munich, Germany.
    13. repec:spr:rvmgts:v:11:y:2017:i:4:d:10.1007_s11846-016-0209-9 is not listed on IDEAS
    14. Dey, Oindrila & Banerjee, Swapnendu, 2013. "Status, incentives and random favouritism," MPRA Paper 49188, University Library of Munich, Germany.

    More about this item

    Keywords

    subjective performance evaluation; bias; social ties; team size; favoritism;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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