In Search of Organizational Alignment Using a 360-Degree Assessment System: A Field Experiment in a Retail Chain
58 Pages Posted: 27 Jan 2018 Last revised: 13 Mar 2019
Date Written: March 12, 2019
We analyze the effects of a field experiment introducing a values-based 360-degree assessment system at an Indian retailer. The director intended to encourage store managers, rewarded based on high-powered incentives linked to financial results, to behave according to the organization’s long term values and goals. Surprisingly, we find that the intervention drove even higher effort on performance associated with pre-existing monetary incentives, but, on average, did not affect nonfinancial performance dimensions linked to long term goals. We integrate our statistical results with qualitative information from interviews, which highlighted the importance of reinforcing the organizational goals’ message and providing support for their attainment. We also show more favorable effects for stores with tenured managers and higher availability of inventory (a proxy for support). Our findings highlight important factors for successful implementations of 360-degree systems as complements to explicit incentives. Finally, we share some lessons learned with respect to performing field experiments.
Keywords: 360-degree assessments, values, implicit incentives, field experiment, performance evaluation.
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