Competitive Strategy, Performance Appraisal and Firm Results

47 Pages Posted: 18 Jul 2016

See all articles by José Alberto Bayo Moriones

José Alberto Bayo Moriones

Public University of Navarre - Department of Business Administration

Jose E. Galdon-Sanchez

Universidad Publica de Navarra ; IZA

Sara Martinez-de-Morentin

Universidad Pública de Navarra

Abstract

In this study, we address the relationship between performance appraisal and competitive strategy, as well as the impact of this relationship on firm performance. The results indicate that the adoption of developmental performance appraisal and the use of administrative performance appraisal are higher among firms that pursue differentiation strategies compared to those competing on costs. Regarding firm performance, the interaction between a developmental appraisal system and a quality strategy displays higher return on equity and sales per employee. Those firms that combine a focus on innovation with administrative performance appraisal also enjoy higher performance. Finally, when the firm competes on the basis of cost reduction, the use of administrative appraisal increases the sales per employee.

Keywords: performance appraisal, competitive strategy, firm performance, developmental appraisal, administrative appraisal

JEL Classification: M12, M52

Suggested Citation

Bayo Moriones, José Alberto and Galdon-Sanchez, Jose E. and Martinez-de-Morentin, Sara, Competitive Strategy, Performance Appraisal and Firm Results. IZA Discussion Paper No. 10041. Available at SSRN: https://ssrn.com/abstract=2810452

José Alberto Bayo Moriones (Contact Author)

Public University of Navarre - Department of Business Administration ( email )

Campus de Arrosadia
31006 Pamplona
Spain
34 948 169 377 (Phone)
34 948 169 404 (Fax)

Jose E. Galdon-Sanchez

Universidad Publica de Navarra ( email )

Department of Economics
Campus de Arrosadia
Pamplona, Navarra 31006
Spain
+34 948 16 9338 (Phone)
+34 948 16 97 21 (Fax)

HOME PAGE: http://www.econ.unavarra.es/~galdon/

IZA

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

HOME PAGE: http://www.iza.org/en/webcontent/personnel/photos/index_html?key=1494

Sara Martinez-de-Morentin

Universidad Pública de Navarra ( email )

Campus de Arrosadía
Pamplona, Navarra 31006
Spain

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