Loyalty or Competence: Political Use of Performance Information and Negativity Bias

Abstract

Abstract This article explores how political principals weigh loyalty and competence in public personnel decisions. Exploiting the abrupt shift in political leadership following the impeachment of President Park Geun‐hye of Korea, the authors examine how the newly elected president made the decision to retain or dismiss 118 agency heads appointed by the previous administration. The evidence shows the importance of loyalty in managerial survival: those who had a political patronage relationship with the ousted president were less likely to survive in the new administration. However, the authors also demonstrate the relevance of competence, as measured by the outcomes of agency performance evaluation. Further, the article shows the existence of negativity bias: the punishment for low performance is greater than the reward for high performance. Finally, the authors provide support for the idea that political principals reward loyalists, but only if they show acceptable levels of competence.