NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

What Do Performance Appraisals Do?

Peter Cappelli, Martin Conyon

NBER Working Paper No. 22400
Issued in July 2016
NBER Program(s):LS

This paper investigates employee performance appraisals using data from a single US firm between 2001 and 2007. We find that performance appraisals are both informative and drive important components of the employment contract. We find that employee appraisal scores vary considerably both between and within individuals over time. In addition, we show that employee performance appraisal scores are related to a range of important employment outcomes, including merit pay and bonuses, promotions, demotions and dismissals, as well as employee quits.

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Document Object Identifier (DOI): 10.3386/w22400

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