Are self-evaluations helpful or harmful when employees are unaware of their marginal contribution to firm welfare?

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Title: Are self-evaluations helpful or harmful when employees are unaware of their marginal contribution to firm welfare?
Author: Reichert, Bernhard Erich
Abstract: This study examines whether eliciting self -evaluations increases or decreases the propensity of a productive agent to retaliate against an employer for paying compensation that the agent perceives to be too low for the work performed . Specifically , I consider a setting in which a principal knows more about the agent’s production than even the agent can observe . In such a setting , an agent might perceive that s /he is being underpaid if the principal pays less than the agent believes s /he deserves , especially if the agent is overconfident about his /her own productive ability . Such an agent could take retaliatory actions against the principal that would be costly to both parties . Self -evaluations could mitigate such tendencies if they result in compensation that is more aligned with agent self -perceptions . Alternatively , self -evaluations could worsen such tendencies if they reinforce the perceived inequity of compensation that does not match agent self -perceptions . I present experimental evidence from comparing a control condition without self -evaluations to three different forms of self -evaluation reports , finding evidence consistent with the premise that self -evaluations increase retaliatory actions and lower welfare . My findings show a cost to self -evaluations that thus far has not been sufficiently considered in the literature .
URI: http : / /hdl .handle .net /2152 /ETD -UT -2010 -08 -1624
Date: 2010-10-26

Citation

Are self-evaluations helpful or harmful when employees are unaware of their marginal contribution to firm welfare?. Doctoral dissertation, University of Texas at Austin. Available electronically from http : / /hdl .handle .net /2152 /ETD -UT -2010 -08 -1624 .

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