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

Published Online:https://doi.org/10.1287/mnsc.2020.3703

References

  • Allen E , Dechow P , Pope D , Wu G (2017) Reference-dependent preferences: Evidence from marathon runners. Management Sci. 63(6):1657–1672.LinkGoogle Scholar
  • Altonji J , Pierret C (2001) Employer learning and statistical discrimination. Quart. J. Econom. 116(1):313–350.CrossrefGoogle Scholar
  • Anderson S , Dekker H , Sedatole K , Wiersma E (2014) Field evidence of bias in subjective ratings. Working paper, University of California, Davis, Davis.Google Scholar
  • Asare S , Wright A (1995) Normative and substantive expertise in multiple hypotheses testing. Organ. Behav. Human Decision Processes 64(2):171–184.CrossrefGoogle Scholar
  • Bailey W , Hecht G , Towry K (2011) Dividing the pie: The influence of managerial discretion extent on bonus pool allocation. Contemporary Accounting Res. 28(5):1562–1584.CrossrefGoogle Scholar
  • Baker G , Gibbs M , Holmstrom B (1994) The internal economics of the firm: Evidence from personnel data. Quart. J. Econom. 109(4):881–919.CrossrefGoogle Scholar
  • Baker G , Jensen M , Murphy K (1988) Compensation and incentives: Practice vs. theory. J. Finance 43(3):593–616.CrossrefGoogle Scholar
  • Belsley D , Kuh E , Welsch R (1980) Regression Diagnostics: Identifying Influential Data and Sources of Collinearity (John Wiley & Sons, Inc., Hoboken, NJ).CrossrefGoogle Scholar
  • Berger J , Pope D (2011) Can losing lead to winning? Management Sci. 57(5):817–827.LinkGoogle Scholar
  • Bol J (2008) Subjectivity in compensation contracting. J. Accounting Literature 27:1–24.Google Scholar
  • Bol J (2011) The determinants and performance effects of managers’ performance evaluation biases. Accounting Rev. 86(5):1549–1575.CrossrefGoogle Scholar
  • Bol J , Smith S (2011) Spillover effects in subjective performance evaluation: Bias and the asymmetric influence of controllability. Accounting Rev. 86(4):1213–1230.CrossrefGoogle Scholar
  • Bonner S (2008) Judgment and Decision Making in Accounting , 1st edition (Pearson Education, Inc., Upper Saddle River, NJ).Google Scholar
  • Cadman B , Cassar G (2015) Explicit and implicit incentives: Longitudinal evidence from NCAA football head coaches employment contracts. Working paper, University of Utah, Salt Lake City.Google Scholar
  • Campbell D (2008) Nonfinancial performance measures and promotion-based incentives. J. Accounting Res. 46(2):297–332.CrossrefGoogle Scholar
  • Chan E (2018) Promotion, relative performance information, and the Peter principle. Accounting Rev. 93(3):83–103.CrossrefGoogle Scholar
  • Chapman K , Southwick L (1991) Testing the matching hypothesis: The case of Major-League Baseball. Amer. Econom. Rev. 81(5):1352–1360.Google Scholar
  • Chiappori PA , Salanie B , Valentin J (1999) Early starters vs. late beginners. J. Political Econom. 107:731–760.CrossrefGoogle Scholar
  • Cichello M , Fee C , Hadlock C , Sonti R (2009) Promotions, turnover, and performance evaluation: evidence from the careers of division managers. Accounting Rev. 84(4):1119–1143.CrossrefGoogle Scholar
  • DeGroot MH (1970) Optimal Statistical Decisions (McGraw-Hill, New York).Google Scholar
  • Dikolli S , Mayew W , Nanda D (2014) CEO tenure and the performance-turnover relation. Rev. Accounting Stud. 19:281–327.CrossrefGoogle Scholar
  • Du F , Erkens D , Young M , Tang G (2018) How adopting new performance measures affects subjective performance evaluations: Evidence from EVA adoption by Chinese state-owned enterprises. Accounting Rev. 93(1):161–185.CrossrefGoogle Scholar
  • Edmans A , García D , Norli Ø (2007) Sports sentiment and stock returns. J. Finance 62(4):1967–1998.CrossrefGoogle Scholar
  • Farber H , Gibbons R (1996) Learning and wage dynamics. Quart. J. Econom. 111(4):1007–1047.CrossrefGoogle Scholar
  • Gibbons R , Waldman M (1999) A theory of wage and promotion dynamics inside firms. Quart. J. Econom. 114(4):1321–1358.CrossrefGoogle Scholar
  • Gibbs M (1995) Incentive compensation in a corporate hierarchy. J. Accounting Econom. 19(2–3):247–277.CrossrefGoogle Scholar
  • Gibbs M , Merchant K , Van der Stede W , Vargus M (2004) Determinants and effects of subjectivity in incentives. Accounting Rev. 79(2):409–436.CrossrefGoogle Scholar
  • Grabner I , Moers F (2013) Managers’ choices of performance measures in promotion decisions: An analysis of alternative job assignments. J. Accounting Res. 51(5):1187–1220.CrossrefGoogle Scholar
  • Greene W (2004) The behaviour of the maximum likelihood estimator of limited dependent variable models in the presence of fixed effects. Econom. J. 7(1):98–119.CrossrefGoogle Scholar
  • Holmstrom B (1979) Moral hazard and observability. Bell J. Econom. 10(1):74–91.CrossrefGoogle Scholar
  • Holmstrom B (1999) Managerial incentive problems: A dynamic perspective. Rev. Econom. Stud. 66(1):169–182.CrossrefGoogle Scholar
  • Ittner C , Larcker D , Meyer M (2003) Subjectivity and the weighting of performance measures: evidence from a balanced scorecard. Accounting Rev. 78(3):725–758.CrossrefGoogle Scholar
  • Kahn L , Lange F (2014) Employer learning, productivity, and the earnings distribution: Evidence from performance measures. Rev. Econom. Stud. 81(4):1575–1613.CrossrefGoogle Scholar
  • Lange F (2007) The speed of employer learning. J. Labor Econom. 25(1):1–35.CrossrefGoogle Scholar
  • MacPherson B (2015) Minor league baseball: Squeezed by low pay. Providence Journal (February 21), https://www.providencejournal.com/article/20150221/Sports/150229787.Google Scholar
  • Massey C , Thaler R (2013) The loser’s curse: Decision making and market efficiency in the National Football League draft. Management Sci. 59(7):1479–1495.LinkGoogle Scholar
  • Merchant K , Van der Stede W (2012) Management Control Systems: Performance Measurement, Evaluation, and Incentives , 3rd edition (Prentice Hall, London).Google Scholar
  • Meyer M (1991) Learning from coarse information: Biased contests and career profiles. Rev. Econom. Stud. 58(1):15–41.CrossrefGoogle Scholar
  • Murphy K (1986) Incentives, learning, and compensation: A theoretical and empirical investigation of managerial labor contracts. RAND J. Econom. 17(1):59–76.CrossrefGoogle Scholar
  • Nickerson R (1998) Confirmation bias: A ubiquitous phenomenon in many guises. Rev. General Psych. 2(2):175–220.CrossrefGoogle Scholar
  • Pope D , Schweitzer M (2011) Is Tiger Woods loss averse? Persistent bias in the face of experience, competition, and high stakes. Amer. Econom. Rev. 101(1):129–157.CrossrefGoogle Scholar
  • Prendergast C (1999) The provision of incentives in firms. J. Econom. Literature 37(1):7–63.CrossrefGoogle Scholar
  • Rabin M , Schrag J (1999) First impressions matter: A model of confirmatory bias. Quart. J. Econom. 114(1):37–82.CrossrefGoogle Scholar
  • Spurr S , Barber W (1994) The effect of performance on a worker’s career: Evidence from minor league baseball. Indust. Labor Relations Rev. 47(4):692–708.CrossrefGoogle Scholar
  • Staw B , Hoang H (1995) Sunk costs in the NBA: Why draft order affects playing time and survival in professional basketball. Admin. Sci. Quart. 40(3):474–494.CrossrefGoogle Scholar
  • Woods A (2012) Subjective adjustments to objective performance measures: The influence of prior performance. Accounting Organ. Soc. 37(6):403–425.CrossrefGoogle Scholar
  • Wooldridge J (2002) Econometric Analysis of Cross Section and Panel Data , 1st edition (MIT Press, Cambridge, MA).Google Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.