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Self-Serving Biases in Team Member Communication: The Effects of Voluntary Communication and Explanation

Sat, October 3, 1:00 to 2:30pm, TBA

Abstract

One significant challenge of evaluating knowledge-based employees is that the individual performance of each employee is difficult to measure. This is because knowledge-based employees often work in teams where the manager is unable to observe individual contributions. In this setting, managers often seek private communication from employees about each team members’ performance (team member communication, or TMC) to help them assess employees individually. While TMC provides managers with useful insights that allow them to better link individual rewards with contributions, observations from practice suggest that TMC can be fraught with intentional, self-serving biases that limit TMC’s value. We study the effects of two practice-relevant attributes of TMC on self-serving biases and individual efforts: (1) whether the communication is mandatory or voluntary, and (2) whether or not explanations for the TMC are required. Consistent with our expectations, experimental results suggest that low-ability team members provide more biased TMC and less effort when the TMC is voluntary than when it is mandatory. We also find that when TMC is voluntary, the requirement of explanation not only reduces low-ability team members’ biases and increases their effort, but also leads to managers’ higher quality bonus allocation decisions and greater team output.

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