Gender Biases in Performance Evaluation: The Role of Beliefs versus Outcomes

Abstract

We investigate whether gender distorts performance evaluation in environments where outcomes are determined by unobservable choices and luck. Evaluators form beliefs about leaders’ choices and make discretionary payment decisions. We find that while discretionary payments made to male leaders are determined by both outcomes and evaluators’ beliefs, those made to female leaders are determined by outcomes only. We label this new source of gender bias as the gender belief-outcome gap. Our findings imply that good outcomes are necessary for women to get bonuses, but men can receive bonuses for bad outcomes as long as evaluators hold them in high regard.

Keywords: Gender gaps, Performance evaluation, Biases in belief updating, Outcome bias, Social preferences, Laboratory experiments

JEL Classification: C92, D91, J71