The Impact of Input Information in the Performance Report on Employee Performance

Abstract

In this study, we investigate how the inclusion of input information (i.e., time devoted to the task) in the performance report to the manager and whether the manager has discretion to act on this information affect employee performance. We investigate these effects in a setting in which achieving a target results in a bonus and either 1) managers will only review performance reports or 2) managers will review performance reports and can favorably adjust an employee’s target. With a simple, effort-based task, we find employees perform better when managers have discretion over targets and this effect is amplified by the inclusion of input information in the performance report. In a second experiment, utilizing a more complex task with a weaker link between effort and performance, we find input information motivates performance even without manager discretion over target setting. Our results provide important insights into workplace settings in which inclusion of input information in performance reports positively influences performance.