SMU SOE Seminar (Mar 24, 2017): Multitasking Incentives and Biases in Subjective Performance Evaluation

Subjective performance evaluation serves as a double-edged sword. While it can mitigate multitasking agency problems, it also opens the door to evaluators’ biases, resulting in lower job satisfaction and a higher rate of worker quits. Using the personnel records of individual sales representatives in a major car sales company in Japan, we provide novel evidence for both sides of subjective performance evaluation: (1) the sensitivity of evaluations to sales performance declines with the marginal productivity of hard-to-measure tasks, and (2) a within-worker decline in evaluation that is unrelated to observable performance is consistently associated with higher worker quits despite our attempts to mitigate endogeneity bias.

Keywords: Subjective performance evaluation, job satisfaction, productivity, endogeneity bias

JEL Classification: M52, M55

Click here to view the paper.

Click here to view his CV.