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

72 Pages Posted: 22 Jul 2016 Last revised: 8 Jun 2018

See all articles by Dirk E. Black

Dirk E. Black

University of Nebraska at Lincoln - School of Accountancy

Marshall D. Vance

Virginia Tech

Date Written: May 29, 2018

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

Suggested Citation

Black, Dirk E. and Vance, Marshall D., Do First Impressions Last? The Impact of Initial Assessments and Subsequent Performance on Promotion Decisions (May 29, 2018). AAA 2017 Management Accounting Section (MAS) Meeting. Available at SSRN: https://ssrn.com/abstract=2812731 or http://dx.doi.org/10.2139/ssrn.2812731

Dirk E. Black (Contact Author)

University of Nebraska at Lincoln - School of Accountancy ( email )

307 College of Business Administration
Lincoln, NE 68588-0488
United States

Marshall D. Vance

Virginia Tech ( email )

Blacksburg, VA 24061
United States

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