Effects of Subordinate Likeability and Balanced Scorecard Format on Permformance-Related Judgments

Abstract:     
Previous appraisal research has found that subordinate manager likeability biases appraisal related judgments (Cardy and Dobbins, 1986; Tsui and Barry, 1986; Turban et al., 1990). We investigate whether the format and structure of the Balanced Scorecard (BSC) moderates subordinate likeability bias on evaluators' performance-related judgments (overall performance rating, strength of conviction in rating, and bonus money allocation). Following Lipe and Saltario (2002), we characterize the evaluation of subordinate managers using a multidimensional performance measurement system as a cognitively difficult task. We hypothesize that, in comparison to when a BSC format is not used, use of a BSC format fosters a 'divide-and-conquer' approach by evaluators and that the structure of the BSC will guide the application of this approach, which, in turn, is expected to mitigate the influence of subordinate likeability on evaluators' performance-related judgments. Unexpectedly, we find that the biasing effect of subordinate manager likeability on performance-related judgments is not moderated by the format and structure of the BSC. We also provide supplemental mediation analysis which demonstrates that likeability has a direct effect on bonus allocations in addition to the indirect effect it conveys through improved overall performance ratings.

Number of Pages in PDF File: 39

Keywords: Performance Measurement, BSC, Affect, Likeability

JEL Classification: M41

working papers series