Facing a Calibration Committee: The Impact on Costly Information Collection and Subjective Performance Evaluation

51 Pages Posted: 19 Aug 2017 Last revised: 4 Sep 2020

See all articles by Farah Arshad

Farah Arshad

The University of Manchester

Eddy Cardinaels

Tilburg University - Tilburg University School of Economics and Management; KU Leuven

Bart Dierynck

Tilburg University

Date Written: November 9, 2018

Abstract

Recently, many organizations have installed calibration committees to review and adjust subjective performance evaluations of supervisors about their employees. This study uses an experimental setting to examine the impact of calibration committees on supervisor evaluation behavior. We predict and find that a calibration committee instigates supervisors to collect costly additional information that helps to better explain the performance of their employees. We also find that through supervisors’ collection of costly additional information, the presence of a calibration committee allows supervisors to distinguish between employees based on the variation in underlying performance between employees. We also study the impact of the composition of calibration committees and find that the presence of a third party (i.e. HR-manager) in the calibration committee leads to better information transfer during discussion in the calibration committee. Specifically, supervisors are less likely to anchor on their initial ratings and more likely to consider other supervisors’ information about employees to reach a consensus about their evaluations when the HR-manager is present. Our study provides new insights about calibration committees by eliciting behavioral mechanisms that instigate supervisors to make more thorough evaluations.

Keywords: Calibration committees, Subjective performance evaluation, Information collection, Information transfer

JEL Classification: M40, M41

Suggested Citation

Arshad, Farah and Cardinaels, Eddy and Dierynck, Bart, Facing a Calibration Committee: The Impact on Costly Information Collection and Subjective Performance Evaluation (November 9, 2018). Available at SSRN: https://ssrn.com/abstract=3021683 or http://dx.doi.org/10.2139/ssrn.3021683

Farah Arshad (Contact Author)

The University of Manchester ( email )

Oxford Road
Manchester, M13 9PL
United Kingdom

Eddy Cardinaels

Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Warandelaan 2
Tilburg, 5000 LE
Netherlands
+31 134668231 (Phone)

HOME PAGE: http://www.tilburguniversity.edu/webwijs/show/?uid=e.cardinaels

KU Leuven ( email )

Naamsestraat 69
Leuven, B-3000
Belgium
+32 16326984 (Phone)

HOME PAGE: http://www.kuleuven.be/wieiswie/nl/person/00013472

Bart Dierynck

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

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