The Effects of Accountability on Favoritism in Subjective Performance Evaluations: An Eye-Tracking Study

Bauch, Kai A.; Weissenberger, Barbara E. (2020). The Effects of Accountability on Favoritism in Subjective Performance Evaluations: An Eye-Tracking Study Elsevier 10.2139/ssrn.3646301

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This study uses an eye-tracking experiment to investigate the effects of accountability on favoritism in subjective performance evaluations. While prior work provides evidence that managers exert favoritism when subjectively evaluating the performance of preferred subordinates, less is known about how managers use their discretion and deal with performance information when exerting favoritism as well as possible control mechanisms firms may implement to mitigate its occurrence. We develop and test theory suggesting that the effectiveness of accountability to mitigate favoritism depends on managers’ cognitive processing of performance information. We argue that accountability will cause managers to examine performance information more thoroughly, which may entail having to scrutinize information which reflects unfavorable on a preferred subordinate. This causes cognitive dissonance and managers resolve this dissonance by engaging in motivated reasoning and cognitively discounting this information. The more managers reduce cognitive dissonance by discounting unfavorable information, the less is the favoritism-mitigating effect of accountability. Consistent with our prediction, we find that the more cognitive processing managers allocate to information that reflects unfavorable on a preferred subordinate, the lower the efficacy of accountability in mitigating favoritism. We contribute by enhancing our understanding of the effects of accountability in subjective performance evaluation.

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