Why Firms Evaluate Individually their Employees

Economie et Prévision 164-165 (3/4): 27-55

Posted: 7 Mar 2008 Last revised: 11 Dec 2013

See all articles by Patricia Crifo

Patricia Crifo

Ecole Polytechnique, Paris - Laboratoire d'Econometrie; Université Paris X Nanterre - Department of Economics; Center for Interuniversity Research and Analysis on Organization (CIRANO)

Marc-Arthur Diaye

Independent

Nathalie Greenan

Immeuble Le Descartes II - Centre d'Etudes de l'Emploi

Date Written: 2004

Abstract

This article proposes a theory of individual evaluation interviews alternative to ex post performance measures when autonomy diffuses with little wage flexibility. Our agency model with teamwork shows that strong horizontal interdependencies and a supermodular technology do not guarantee coordination towards the Pareto-optimal equilibrium. The cost of monetary incentives increases in such a context and the principal has to rely on a less costly system. Individual evaluation interviews generate an ex ante signal convincing workers that a team spirit exists. The predictions of this model are tested empirically with data from the 1997 French survey on Organizational Change and Computerization. Evaluation interviews appear to be more determined by the collective nature of work than by the degree of autonomy and do not raise monetary rewards but rather a system of beliefs over work.

Keywords: Teamwork, evaluation interviews

JEL Classification: J3, D2

Suggested Citation

Crifo, Patricia and Diaye, Marc-Arthur and Greenan, Nathalie, Why Firms Evaluate Individually their Employees (2004). Economie et Prévision 164-165 (3/4): 27-55. Available at SSRN: https://ssrn.com/abstract=1103103

Patricia Crifo (Contact Author)

Ecole Polytechnique, Paris - Laboratoire d'Econometrie ( email )

Route de Saclay
Palaiseau, 91128
France

Université Paris X Nanterre - Department of Economics

Nanterre Cedex, 92001
France

Center for Interuniversity Research and Analysis on Organization (CIRANO)

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

Marc-Arthur Diaye

Independent

No Address Available

Nathalie Greenan

Immeuble Le Descartes II - Centre d'Etudes de l'Emploi ( email )

29, promenade Michel Simon
Noisy Le Grand, 93166
France
33 1 45 92 68 44 (Phone)
33 1 49 31 02 44 (Fax)

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