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The Economics of Performance Appraisals

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  • Marc-Arthur Diaye
  • Nathalie Greenan

Abstract

Performance appraisals have become a widespread practice in OECD member countries. However, whereas the problem of constructing an optimal contract with subjective evaluation receives a lot of attention, rmlevel performance appraisals are strikingly left outside of economic theory. The purpose of this paper is threefold: rst, to theoretically de ne what performance appraisals are; second, to analyze the e ects of incentive contracts on e ort and wage using performance appraisals; and third, to theoretically quantify the selection e ects driven by the implementation of performance appraisals.
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Suggested Citation

  • Marc-Arthur Diaye & Nathalie Greenan, 2012. "The Economics of Performance Appraisals," TEPP Working Paper 2012-15, TEPP.
    • Handle: RePEc:tep:teppwp:wp12-15
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    File URL: http://www.tepp-repec.eu/RePEc/files/teppwp/TEPP-WP-12-15-Diaye-Greenan.pdf
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    References listed on IDEAS

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    7. Marc-Arthur Diaye & Nathalie Greenan & Michal W. Urdanivia, 2008. "Subjective Evaluation of Performance and Evaluation Interview: Empirical Evidence from France," NBER Chapters, in: The Analysis of Firms and Employees: Quantitative and Qualitative Approaches, pages 107-131, National Bureau of Economic Research, Inc.
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    9. Stefan Bender & Julia Lane & Kathryn Shaw & Fredrik Andersson & Till von Wachter, 2008. "Introduction to "The Analysis of Firms and Employees: Quantitative and Qualitative Approaches"," NBER Chapters, in: The Analysis of Firms and Employees: Quantitative and Qualitative Approaches, pages 1-16, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Rahma Daly & Marc-Arthur Diaye, 2017. "Do Performance Appraisals Decrease Employees’ Perception of Their Psychosocial Risks?," Documents de recherche 17-04, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.

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