An Examination of the Interactive Effect of Feedback Source and Sign in the Offshoring Environment: A Social Identity Perspective

Public accounting firms regularly rely on offshore professionals to assist with client work. However, differences in interpersonal dynamics between offshore staff members and the supervisors they report to may yield positive and/or negative work outcomes. We examine how feedback source (offshore or onshore supervisor) and feedback sign (negative or positive) interact to affect offshore staff members' satisfaction with feedback. This is an important issue because subordinate satisfaction with performance feedback is a key determinant of future performance and turnover intentions. We find that offshore staff members are less satisfied with negative feedback from an offshore (local Indian) supervisor, a member of their in-group, than an onshore (remote U.S.) supervisor, a member of their out-group. However, their satisfaction with positive feedback does not significantly differ between feedback sources. Further analysis reveals that greater satisfaction is associated with increases in the effort the staff member plans to put forth in the future. JEL Classifications: M40; M41; M54; D91. Data Availability: Please contact the authors.