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Performance Appraisals and the Impact of Forced Distribution: An Experimental Investigation

Author

Listed:
  • Berger, Johannes

    (University of Cologne)

  • Harbring, Christine

    (RWTH Aachen University)

  • Sliwka, Dirk

    (University of Cologne)

Abstract

A real effort experiment is investigated in which supervisors have to rate the performance of individual workers who in turn receive a bonus payment based on these ratings. We compare a baseline treatment in which supervisors were not restricted in their rating behavior to a forced distribution system in which they had to assign differentiated grades. We find that productivity was significantly higher under a forced distribution by about 8%. But also in the absence of forced distribution, deliberate differentiation positively affected output in subsequent work periods.

Suggested Citation

  • Berger, Johannes & Harbring, Christine & Sliwka, Dirk, 2010. "Performance Appraisals and the Impact of Forced Distribution: An Experimental Investigation," IZA Discussion Papers 5020, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp5020
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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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