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Does Facetime With The Boss Matter? Soft Information Communication And Organizational Performance

Author

Listed:
  • Samarth Gupta

    (Ahmedabad University)

  • Kaushalendra Kishore

    (Centre for Advanced Financial Research and Learning (CAFRAL))

Abstract

Can better communication with the boss (she) improve the performance of the employees (he), even if he has authority for making decisions? The term boss, in our paper, refers to the person who decides the remuneration of the employee based on his performance. An employee’s performance depends not only on his effort but also on unpredictable factors beyond his control, which may be soft information. Communicating this soft information through face-to-face interaction would allow the employee to explain why he may have performed poorly (or well). Using the informativeness principle, the boss can offer more efficient contracts ex ante which share more risk and elicit higher level of effort by the employees. Using granular within bank data, we exploit exogenous change in the ability of bank managers to communicate with their boss and show that better communication improves their productivity. The results in the paper suggest that there may be an alternative complementary explanation (compared to Stein (2002)) for why small banks are more efficient at lending to small businesses.

Suggested Citation

  • Samarth Gupta & Kaushalendra Kishore, 2022. "Does Facetime With The Boss Matter? Soft Information Communication And Organizational Performance," Working Papers 022285, Centre for Advanced Financial Research and Learning (CAFRAL).
    • Handle: RePEc:ris:cafral:022285
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    File URL: https://www.cafral.org.in/sfControl/content/Speech/510202255415PMKK_May22.pdf
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    Keywords

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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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