3.evidence on incentive effects of subjective performance evaluations

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1、EVIDENCEONINCENTIVEEFFECTSOFSUBJECTIVEPERFORMANCEEVALUATIONSAXELENGELLANDTANDREGINAT.RIPHAHN*Theauthorsinvestigatetheeffectofmanagerialperformanceevaluationstylesonemployeeworkeffort.Usingpaneldataon4,080employeesinaSwissunitofaninternationalcompanyfortheperio

2、d1999–2002,theytesttwohypothesesusingpaidandunpaidovertimeworkaseffortindicators.Thecompanyappliestwoperformance-basedremunerationmechanisms:anindi-vidual“surprise”bonusandoneinwhichsalaryisaffectedbytheextenttowhichanindividualhasreachedpersonalizedtargets.Th

3、eauthorshypothe-sizethateffortishigherindepartmentsinwhichindividualperformanceevaluationsaremoreflexibleovertimeaswellaswhensurprisebonusesareusedmorefrequently.Bothhypothesesaresupported,andtheestimatedef-fectsaresubstantial.Increasesinratingflexibilityorbonus

4、paymentsbyonestandarddeviationabovethemeanincreaseaverageovertimehoursbymorethan20%.Thefindingsarerobustandsuggestthatsurprisebonusesandflexibleperformanceevaluationsovertimeprovideeffectiveincentives.Contractsthatdeterminesalarybasedoncultureisconsideredtobepar

5、tofindividualsubjectiveevaluationshaveincentiveef-performance.Suchcompensationschemesfectsthatdifferfromthoseofothertypesofbynaturehaverelationalfeaturesandraiseperformancepaysuchaspieceratesorcom-newissues:supervisors’andemployees’per-missions.Thisisimportant

6、sincesubjectiveceptionsofperformancemaynotcorre-performancemeasuresareincreasinglyusedspondandfavoritismmayarise.Onlysinceinorganizationsinwhichjobcomplexityistheearly2000shavethesecharacteristicsofhigh,individualproductivityishardtomea-compensationschemesattr

7、actedconsider-sure,andcompliancewiththenormsoffirmableinterestinthetheoreticalliterature(seeMacLeod2003;Levin2003).Inthispaperweevaluateemployees’ef-*AxelEngellandtisaprofessionalstatisticalprogram-fortresponsetomanagers’differentstylesofmerinthefieldofvalidatio

8、nanddesignofcreditratingapplyingsubjectiveevaluations.Weprovideprocedures.ReginaRiphahnisProfessorofEconomicsanintra-firmtestoftherelevanceofman-attheUniversityofErlangen-Nurembergi