2020/01/08 by Isabella Grabner, Grabner, Isabella, Judith Künneke +3
Business, Management and Accounting · Social Sciences · #Accounting and Organizational Management #Auditing, Earnings Management, Governance #Experimental Behavioral Economics Studies
paper · doi:10.57938/e128693b-9171-4a39-8482-3e55bd2e6d62
openalex publication_date 2020/01/08 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/23
While prior research on performance evaluation bias has mainly focused on the <br/>determinants and consequences of rating errors, we investigate how a firm can provide implicit <br/>incentives to supervisors to mitigate these errors via its calibration committee. We empirically <br/>examine the extent to which a calibration committee incorporates supervisors' evaluation behavior <br/>with respect to their subordinates in the performance evaluation outcomes, i.e., performance ratings <br/>and promotion decisions, for these supervisors. In our study, we distinguish between lack of skills <br/>and opportunism as two important facets of evaluation behavior, which we expect the calibration <br/>committee to address differently. Using panel data of a professional service firm, we show that <br/>supervisors' opportunistic behavior to strategically inflate subordinates' performance ratings is <br/>disciplined through a decrease in the supervisors' own performance rating, while the supervisors' <br/>skills to provide less compressed and thus more informative performance ratings is rewarded <br/>through a higher likelihood of promotion.