Do First Impressions Last? The Impact of Initial Assessments and Subsequent Performance on Promotion Decisions

Abstract

This paper examines whether and for how long managers’ initial assessments of employee ability influence promotion decisions. Using archival initial assessment, performance, and job assignment data, we find that, controlling for performance, initial assessments are associated with promotion decisions for at least five years after the initial assessment was made. We show that the relative weight on initial assessments versus observed performance for promotion decisions declines as additional on-the-job performance signals are observed, reflecting the declining relative informativeness of initial assessments about future ability. We also find that initial assessments are positively associated with future performance in the early years of an employee’s career, but the association declines sharply and becomes negative over time. We compare the implied relative weight on initial assessments for promotion decisions to an informativeness benchmark and find initial assessments receive greater weight than implied by the benchmark, suggesting managers update initial beliefs about worker ability slowly given available performance measures.

Keywords: Promotions, Performance evaluation, Employer learning, Dynamic, Ability

JEL Classification: G30, M40, M46, M51, M54