Management Accounting Section Midyear Meeting

Biases and stakeholder presence in subjective performance evaluation

• In Event: Performance Evaluation and Compensation

Abstract

We demonstrate that favoritism biases subjective evaluations and that stakeholder presence can mitigate this bias. Using archival data from professional ski jumping, we find that, controlling for objective performance, subjective evaluations suffer from favoritism. Evaluators favor athletes of their own nationality and athletes that have a compatriot on the judging panel. We test our hypothesis regarding the effects of stakeholder presence taking advantage of the Covid19-related lockdowns, where ski jumping competitions took place without an on-site audience. We predict and provide evidence that an audience’s physical presence during the evaluation process is associated with lower levels of favoritism in subjective evaluations. We contribute to the accounting literature by highlighting how transparent evaluations, including assessment and feedback, may decrease the likelihood that favoritism biases subjective evaluations.

Authors

• Jan Bouwens, University of Amsterdam

• Christian Hofmann, Ludwig Maximilian University of Munich

• Christopher Lechner, Ludwig Maximilian University of Munich