This paper studies how firms can efficiently incentivize supervisors to truthfully report employee performance. To this … altruism sometimes provides a net incentive to report performance truthfully, rather than to bias evaluations upward. The … risk by overrating the agent's performance. Second, I show that by screening for one supervisor type, firms can incentivize …

When verifiable performance measures are imperfect, organizations often resort to subjective performance pay. This may … towards specific tasks. We show that subjective performance pay based on evaluation by a biased supervisor has the same … distorting effect on the agent's effort allocation as incentive pay based on an incongruent performance measure. If the principal …