Performance evaluation judgments: effects of prior experience under different performance evaluation schemes and feedback frequencies

Article Abstract:

A study is presented demonstrating that decision makers' current performance evaluations of others can be biased by their previous experience under a performance evaluation system. In this study, participants were asked to make a set of investment decisions under one of four accounting systems, namely outcome-based evaluation/frequent feedback, outcome-based evaluation/infrequent feedback, decision-based evaluation/frequent feedback, and decision-based evaluation/infrequent feedback. The findings, which are consistent with earlier studies, indicate that knowledge of outcomes influences performance evaluations. It was also found that the extent of the outcome effect differed for the four accounting systems, proving to be greater under the outcome-based evaluation scheme than the decision-based scheme. This variance was found to be influenced by frequency of feedback.

Accounting Methods, Performance, Evaluation, Feedback (Psychology), Feedback (Communication)

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The effect of research method on audit planning and review judgments

Article Abstract:

An experimental study that requested 40 experienced auditors (at five management levels of experience) to review and revise the audit plans of their auditing seniors (pre-management level of auditors) noted differences in the degree of revisions offered, according to review approach. Auditors reviewing audit plans by 'thinking aloud' on tape were more conservative in the number and degree of their revisions to the plan than were auditors who worked on paper. It was also noted, that the more experienced the auditor, the more this difference according to method of review was noticeable. Verbalization is thus shown to affect judgment.

Planning, Usage, Auditing, Judgment, Judgment (Psychology), Verbal behavior, Thought and thinking, Thinking

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Centralization versus delegation and the value of communication

Article Abstract:

The conditions under which the performance of an optimal revelation mechanism can be replicated by a delegation scheme that does not involve communication are examined. A model is considered involving a single privately informed agent. Observable decisions are either made by the principal or delegated to the agent. It is shown that the performance of direct delegation schemes is only equivalent to communication-based centralization schemes in special cases. This is because the agent's communicated message serves both a planning purpose and a control purpose. A discussion of the article by Alison J. Kirby is included.

Business communication

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