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

55 Pages Posted: 22 Jul 2016 Last revised: 23 Feb 2020

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: February 20, 2020

Abstract

This paper examines whether and for how long managers’ initial assessments of employee ability influence promotion decisions. Using archival data from minor league professional baseball, we find that, controlling for performance, initial assessments are associated with promotion decisions for at least six years after the initial assessment was made. We also find that initial assessments are positively associated with future performance at the outset of a player’s career, but the association becomes insignificant after a player accumulates on-the-job experience. We show that the weight on initial assessments 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 construct a proxy for relative informativeness based on coefficients from regressions of future performance on initial assessments and observed performance. When we compare the implied relative weight on initial assessments for promotion decisions to our proxy for relative informativeness, we find assessments receive greater relative weight than implied by informativeness overall and across experience and job-level partitions. Our results suggest 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 (February 20, 2020). 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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