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Performance evaluation bias: A comparative study on the role of financial fixation, similarity-to-self and likeability

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  • Carmona, Salvador
  • Iyer, Govind
  • Reckers, Philip M.J.

Abstract

Performance evaluations are critical to organizational control. Dissatisfaction with systems emphasizing financial targets only has driven many companies to adopt systems using multiple performance measures. These multiple measurement systems (MMS) however may exacerbate certain cognitive biases. Using multiple performance measures can be a cognitively complex task that invites coping reactions anchored in simplifying heuristic biases, such as the likability of the target evaluatee and similarity-to-self. There are reasons to believe that these biases may manifest differently across “individualistic” or “collectivist” cultures. Our study examines three biases (financial fixation, similarity-to-self and likeability) across two distant cultures (United States and Spain) along the individualistic–collectivist dimensions. Participants are MBA students from Spain and the US. Consistent with theory-based predictions, we find that likability and similarity-to-self impact Spanish participants while financial fixation presents greater influence among US participants. These findings underscore the importance of considering national culture in designing performance measurement systems and advise about the role of specific biases, which are not culturally neutral.

Suggested Citation

  • Carmona, Salvador & Iyer, Govind & Reckers, Philip M.J., 2014. "Performance evaluation bias: A comparative study on the role of financial fixation, similarity-to-self and likeability," Advances in accounting, Elsevier, vol. 30(1), pages 9-17.
    • Handle: RePEc:eee:advacc:v:30:y:2014:i:1:p:9-17
    DOI: 10.1016/j.adiac.2014.04.001
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    Cited by:

    1. Thuy‐Van Tran & Janne Järvinen, 2022. "Understanding the concept of subjectivity in performance evaluation and its effects on perceived procedural justice across contexts," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(3), pages 4079-4108, September.
    2. Kai A. Bauch & Peter Kotzian & Barbara E. Weißenberger, 2021. "Likeability in subjective performance evaluations: does it bias managers’ weighting of performance measures?," Journal of Business Economics, Springer, vol. 91(1), pages 35-59, February.

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