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Author ORCID Identifier

https://orcid.org/0000-0002-8116-5039

Document Type

Open Access Dissertation

Degree Name

Doctor of Philosophy (PhD)

Degree Program

Management

Year Degree Awarded

2020

Month Degree Awarded

May

First Advisor

M. David Piercey

Second Advisor

Jeremiah Wayne Bentley

Third Advisor

Yoon Ju Kang

Fourth Advisor

Andrew Lind Cohen

Subject Categories

Accounting | Performance Management

Abstract

Several high-profile companies are leading the charge to remove subjective performance ratings from their performance management processes leaving only narrative evaluations. Using two experiments, I investigate the effects of the ratings on narrative evaluations supervisors provide. In chapter 1, I test theory on supervisor goal attainment to learn how simultaneously providing a performance rating affects the narrative evaluation supervisors provide to employees. In supervisors’ seeking of honesty and social cost reduction goals, I predicted the favorability of narrative evaluations to depend on the presence of ratings and the purpose of the performance evaluation. I used psychological licensing and process accountability theories to develop different expectations for the effects of ratings on narrative evaluations when the evaluation is used for coaching or for bonus purposes. Although I find minor evidence that narrative evaluations are more lenient when social costs are present, I fail to find support for the expected interactive effect of ratings and the purpose of the evaluation on leniency in narrative evaluations. I also provide some insights as to why these hypotheses were not supported. In chapter 2, I test theory on motivated reasoning to learn how simultaneously providing a performance rating affects the narrative evaluation supervisors provide to employees in the presence of directional goals. I predict and find that the favorability of narrative evaluations is influenced by directional goals, but the effect of those directional goals on narrative evaluation favorability is reduced when supervisors also provide a numerical rating of the employee’s performance. The reduction provides evidence that numerical ratings are less affected by directional goals than are narrative evaluations because of the precision and reduced ambiguity of meaning in number scales. This numerical rating then acts as a reasonableness constraint on free-form narrative evaluations which reduces the effect of directional goals on the favorability of the narrative. This study builds on the subjective performance evaluation literature by investigating the relationship between two forms of subjective evaluations: ratings and narratives. Also, this study provides important cautionary information to firms that have removed or are considering removing subjective performance ratings from their performance management systems.

Available for download on Saturday, May 08, 2021

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