Fairness perceptions of annual bonus payments: The effects of subjective performance measures and the achievement of bonus targets

The psychological effects of centrality bias: an experimental analysis

“…Correspondingly, we predict a positive relationship between the perceived fairness of performance evaluation and the willingness to exert work effort. With regard to fairness perceptions, the management accounting literature distinguishes two dimensions of fairness: distributive fairnesswhich refers to the perception of the distribution of outcomes among employees (Burney et al 2009)-and procedural fairness-which reflects the perceived fairness of procedures that are used in the context of performance evaluation (Burney et al 2009;Voußem et al 2016). Given that our paper refers to bias as part of the performance evaluation process, we focus on the procedural fairness of the performance evaluations (Hartmann and Slapničar 2012b).…”

“…In a recent paper, Voußem et al (2016) analyse the relationship between subjective performance measures and fairness perceptions. They detect an inverted U-shaped relationship implying that subjectivity in performance evaluations increases the perceived fairness if the weight placed on the subjective measures is low.…”

“…They argue that, as the emphasis on subjectivity increases, the marginal benefits are likely to decrease, whereas the marginal costs increase. Voußem et al (2016) consider biased evaluations as part of the costs of subjective performance evaluations. However, the relationship between centrality bias and procedural fairness perceptions has not yet been investigated explicitly.…”

“…9 More precisely, we measure FAIRNESS based on the items used by Voußem et al (2016), which we slightly adjusted to account for our experimental context. As with the different types of motivation, the participants were asked to indicate their level of agreement with the four items reported in Table 3.…”

“…For this reason, we illuminate the psychological mechanisms that are activated by compressed subjective performance evaluations. Subjectivity in the context of performance evaluation has gained considerable momentum in recent years due to the shortcomings of objective performance measures (Ahn et al 2010;Bol 2011;Cheng and Coyte 2014;Voußem et al 2016). In particular, objective measures may be insensitive to employees' actions, incongruent with organizational objectives, noisy concerning uncontrollable factors or incomplete with regard to an employee's performance (Bol 2008;Rajan and Reichelstein 2006;Woods 2012).…”