We investigate the use of performance appraisal (PA) in German Firms. First, we derive hypotheses on individual and job based determinants of PA usage. Based on a representative German data set on individual employees, we test these hypotheses and also explore the impact of PA on performance pay...

Firms commonly use supervisor ratings to evaluate employees when objective performance measures are unavailable. Supervisor ratings are subjective and data containing supervisor ratings typically stem from individual firm level data sets. For both these reasons, doubts persist on how useful such...

Supervisors occupy central roles in production and performance monitoring. We study how heterogeneity in performance evaluations across supervisors affects employee and supervisor careers and firm outcomes using data on the performance system of a Scandinavian service sector firm. We show that...

The Peter Principle captures two stylized facts about hierarchies: first, promotions often place employees into jobs for which they are less well suited than for that previously held. Second, demotions are extremely rare. Why do organizations not correct 'wrong' promotion decision? This paper...

Several empirical studies have challenged tournament theory by pointing out that (1) there is considerable pay variation within hierarchy levels, (2) promotion premiums only in part explain hierarchical wage differences and (3) external recruitment is observable on nearly any hierarchy level. We...

The promotion tournament as a potentially important incentive mechanism for top management in transition economies has not been examined by the emerging literature on managerial incentives in transition economies. This paper is the first attempt to fill this important gap in the literature. The...

We estimate a flexible dynamic model of education choices and early career employment outcomes of the French population. Individuals are allowed to choose between 4 options: continue to the next grade, accept a permanent contract, accept a temporary contract, or withdraw from the labor force (a...

We analyse the effects of pension reforms on the planned retirement age of women by exploiting within country variation in pension wealth across cohorts of workers in Italy after the Amato and Dini reforms of the early 1990s, which introduced a "Notionally Defined Contribution" (NDC) method for...

Promotion tournaments play an important role for the provision of incentives in firms. In this paper, we extend research on single-stage rank-order tournaments and analyze behavior in multi-stage elimination tournaments. The main treatment of our laboratory experiment is a two-stage tournament...