Performance Appraisals and the Impact of Forced Distribution–An Experimental Investigation

Performance Appraisals and the Impact of Forced Distribution–An Experimental Investigation

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Article ID: iaor2013506
Volume: 59
Issue: 1
Start Page Number: 54
End Page Number: 68
Publication Date: Jan 2013
Journal: Management Science
Authors: , ,
Keywords: management
Abstract:

A real‐effort experiment is investigated in which supervisors have to rate the performance of individual workers who in turn receive a bonus payment based on these ratings. We compare a baseline treatment in which supervisors are not restricted in their rating behavior to a forced distribution system in which they have to assign differentiated grades. We find that productivity is significantly higher under a forced distribution by about 6% to 12%. However, the productivity effects are less clear cut when participants have prior experience with the baseline condition. Moreover, a forced distribution becomes detrimental when workers have access to a simple option to sabotage each other.

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