Subjective Performance Evaluations and Employee Careers

42 Pages Posted: 3 Mar 2012

See all articles by Anders Frederiksen

Anders Frederiksen

IZA Institute of Labor Economics

Fabian Lange

Yale University - Department of Economics; IZA Institute of Labor Economics

Ben Kriechel

Maastricht University - Research Centre for Education and the Labour Market (ROA); IZA Institute of Labor Economics

Abstract

Firms commonly use supervisor ratings to evaluate employees when objective performance measures are unavailable. Supervisor ratings are subjective and data containing supervisor ratings typically stem from individual firm level data sets. For both these reasons, doubts persist on how useful such data are for evaluating theories in personnel economics and whether findings from such data generalize to the labor force at large. In this paper, we examine personnel data from six large companies and establish how subjective ratings, interpreted as ordinal rankings of employees within narrowly defined peer-groups, correlate with objective career outcomes. We find many similarities across firms in how subjective ratings correlate with earnings, base pay, bonuses, promotions, demotions, separations, quits and dismissals and cautiously propose these as empirical regularities.

Keywords: subjective performance ratings, personnel data, employee careers, career outcomes, incentives, employer learning

JEL Classification: M5

Suggested Citation

Frederiksen, Anders and Lange, Fabian and Kriechel, Ben, Subjective Performance Evaluations and Employee Careers. IZA Discussion Paper No. 6373. Available at SSRN: https://ssrn.com/abstract=2015189

Anders Frederiksen (Contact Author)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Fabian Lange

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8264
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Ben Kriechel

Maastricht University - Research Centre for Education and the Labour Market (ROA) ( email )

P.O. Box 616
Maastricht, MD6200
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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