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Competitive Strategy, Performance Appraisal and Firm Results

Author

Listed:
  • Bayo-Moriones, Alberto

    (University of Navarra)

  • Galdon-Sanchez, Jose Enrique

    (Universidad Pública de Navarra)

  • Martinez-de-Morentin, Sara

    (Universidad Pública de Navarra)

Abstract

In this study, we address the relationship between performance appraisal and competitive strategy, as well as the impact of this relationship on firm performance. The results indicate that the adoption of developmental performance appraisal and the use of administrative performance appraisal are higher among firms that pursue differentiation strategies compared to those competing on costs. Regarding firm performance, the interaction between a developmental appraisal system and a quality strategy displays higher return on equity and sales per employee. Those firms that combine a focus on innovation with administrative performance appraisal also enjoy higher performance. Finally, when the firm competes on the basis of cost reduction, the use of administrative appraisal increases the sales per employee.

Suggested Citation

  • Bayo-Moriones, Alberto & Galdon-Sanchez, Jose Enrique & Martinez-de-Morentin, Sara, 2016. "Competitive Strategy, Performance Appraisal and Firm Results," IZA Discussion Papers 10041, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10041
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    References listed on IDEAS

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    More about this item

    Keywords

    performance appraisal; competitive strategy; firm performance; developmental appraisal; administrative appraisal;
    All these keywords.

    JEL classification:

    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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