Subjective performance evaluation and managerial work outcomes

Abstract

Organisations design performance evaluation systems to obtain desired work outcomes. This study analyses how subjective performance evaluation (SPE), a specific type of performance evaluation, is related to managerial work outcomes—turnover intention, organisational identification, and performance. To this end, we consider two possible mechanisms: feedback quality and trust in the supervisor. Moreover, we also consider whether adding objective performance measures to SPE alters these relationships. Based on questionnaire responses from 751 top executives and middle managers in small and medium enterprises, we find that SPE is negatively related to feedback quality, but this effect is mitigated when SPE is used jointly with objective performance measures. SPE is not directly related to trust in the supervisor when feedback quality is also considered in the analysis because the two mechanisms are inter-related—we find a positive relationship between feedback quality and trust in the supervisor. Both mechanisms are negatively related to turnover intention, but only trust in the supervisor is positively related to organisational identification. Finally, both turnover intention and organisational identification are positively related to performance. Our findings suggest that companies using SPE can improve work outcomes by adding objective performance measures to their performance evaluation system.