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Subjective Performance Evaluations and Employee Careers

Listed author(s):
  • Frederiksen, Anders

    ()

    (Aarhus University)

  • Lange, Fabian

    ()

    (McGill University)

  • Kriechel, Ben

    ()

    (Economix Research & Consulting)

Firms commonly use supervisor ratings to evaluate employees when objective performance measures are unavailable. Supervisor ratings are subjective and data containing supervisor ratings typically stem from individual firm level data sets. For both these reasons, doubts persist on how useful such data are for evaluating theories in personnel economics and whether findings from such data generalize to the labor force at large. In this paper, we examine personnel data from six large companies and establish how subjective ratings, interpreted as ordinal rankings of employees within narrowly defined peer-groups, correlate with objective career outcomes. We find many similarities across firms in how subjective ratings correlate with earnings, base pay, bonuses, promotions, demotions, separations, quits and dismissals and cautiously propose these as empirical regularities.

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File URL: http://ftp.iza.org/dp6373.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6373.

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Length: 42 pages
Date of creation: Feb 2012
Publication status: published in: Journal of Economic Behavior and Organization, 2017, 134, 408-429
Handle: RePEc:iza:izadps:dp6373
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