The Role of Social Influences in Using Accounting Performance Information to Evaluate Subordinates: A Causal Attribution Approach

Abstract

One important role of accounting information is to provide objective information to assist decision makers in evaluating the performance of their subordinates. Yet whether decision makers use accounting data in an objective fashion, independent of interpersonal factors, is an open question. The purpose of this study is to investigate whether similarities in work style (innovator versus adaptor) between a manager and a subordinate influence the manager's causal attributions and subsequent performance evaluation for the subordinate, given accounting performance indicators. The study is conducted in an experimental setting and the research analysis used is developed within the framework of a structural equation model. The results of the study provide initial evidence that interpersonal factors such as work style similarity and personal liking moderate how supervisors use accounting information when they make performance evaluation decisions. The more similar work style between supervisor and subordinate, the more the supervisor likes the subordinate. This, in turn, directly influences what the supervisor believes is the cause of the subordinate's performance.