The Forward-Looking Role of Subjectivity in Performance and Promotion Evaluations: Evidence from Professional Services

Abstract

In this study we examine how non-contractible signals, specifically advice-seeking behavior, affect managers’ overall subjective assessments, and whether this effect changes as the employee gains experience in his or her job role. We also study whether these signals have different effects on subjective measures of employee performance and worthiness for promotion (hereafter, 'promotability'). Leveraging the combined strengths of field and experimental methods, we show that subjective performance and promotability assessments are incrementally affected beyond an objective team performance indicator, when advice-seeking provides a forward-looking signal about the employee’s ability and future performance. Specifically, by conducting an experiment with experienced consulting project managers (mean experience = 23.76 years), we find that frequent advice seeking on a range of issues positively affects subjective performance measures both early and late in the employees’ job tenure because it signals learning. We also show that relatively infrequent consultation positively affects performance measures later in the employee’s development, because it is consistent with expectations of self-sufficiency. Finally, we find that promotability assessments are affected positively only by relatively infrequent advice-seeking. As a whole, these results suggest that advice-seeking has divergent effects on managers’ performance and promotability assessments. Specifically, we identify conditions under which promotability measures differ, even when objective and subjective performance measures do not.