Explain the relationship between performance management and incentives using the key findings from the three articles attached to this question. The word limit should be 1500-2000.

Key Findings- Article 2

Link- wp2020-04.pdf (wu.ac.at)

This analysis explores how coordinating committees (CCs) serve as a strategic tool to reduce performance evaluation bias within organizations, especially in terms of implicit incentives that target supervisor behavior. This study not only focuses on the determinants of appraisal errors and their consequences, but also explores how CC can positively influence supervisors' behavior regarding subordinate performance evaluations, and by extension employees' own. We extend previous research by examining how performance appraisals influence promotion. The boss is responsible for making decisions. This approach is based on the hypothesis that CC can more effectively reduce the biases inherent in performance appraisals by addressing supervisor evaluation behaviors that are classified as incompetent or opportunistic. A calibration committee comprises primarily of senior managers, reviews and coordinates the supervisor's initial performance evaluation the goal is to reduce inter-rated variance, improve the information content of performance evaluation, add ensure consistency in the application of performance criteria.

The study distinguishes two main aspects of appraisal behaviour: lack of control skills and opportunistic behavior. This study consider how calibration committees can provide implicit incentive to combat this behaviour by influencing supervisors’ own performance evaluations and promotion decisions. These results based on panel data from professional services firms, indicate that opportunistic behavior aimed at rising subordinate performance rating is suppressed by lowering superiors’ own performance rating. Conversely the ability to provide informative and less compressed evaluation is rewarded with a higher probability of promotion, highlighting the role of calibration committee, and promoting development and discouraging opportunistic behaviour.

KEY FINDINGS

1. Lacking supervisory skills: The study reiterates the importance of supervisory skills in affecting supervisor evaluation behavior. This is said to be due to performance appraisal ratings which are referred by majority as biased because a supervisor feels uneasy about giving negative feedbacks. According to the research, this uneasiness makes a manager assign overstated marks to poor performers and those who work do not meet certain performance thresholds. Attending calibration committees is important because it encourages improvement of adequate supervisory abilities. Thus, distortions caused by narrow skill view in performance ratings that tend to compress these measures are eliminated so as to come up with a more accurate and just empirical model of assessing performance.

2. Opportunistic Mitigation: It has been found there is decline in the performance ratings of supervisors who engage in opportunistic rating practices—those supervisors who overrate their subordinates. As punishment, this affects their current earnings and may have long term implications on their careers thus making such biased appraisals unattractive. Consequently, this approach directly addresses the economic rewards underlying opportunistic bias aimed at shifting the focus of supervisor towards real supervision and development of subordinates.

3. Rewarding Proficient Evaluation Behavior: Conversely, when supervisors demonstrate better ability to accurately discriminate between different levels of job performance among employees using less compressed rating scales; CC’s reward such actions by providing increased promotions chances. Therefore, this conclusion indicates how important it is to possess supervisory skills which contribute towards human capital formation in a company. Given this scenario, promotions serve as motivation to improve upon critical aspects enhancing hiring while also improving on any prior training efforts already initiated by a supervisor in question.

4. Implications for Human Capital Development: Apart from immediate performance evaluation concerns, the study shows broad implications on human capital development in organizations. By incentivizing skill development and discouraging opportunistic behavior through CCs, firms can improve their overall performance and competitiveness. Supervisors should therefore develop skills such as evaluating, delivering feedback, and developing subordinates which are necessary for the firm’s long run success.

5. Challenges and Limitations: The study also recognizes that while CCs have a potential of mitigating bias and promoting skill development there are inherent challenges of identifying opportunistic behavior accurately and assessing supervisory skills effectively. It therefore behoves the effectiveness see these behaviors accurately and apply appropriate rewards or disciplinary actions.

6. Future Research Directions: Findings suggest possibilities for future research especially on understanding how CCs can better detect biases, manage them before they occur and how to adapt these strategies across different organizational settings/contexts, sectors.

7. Incentivizing Supervisory Skills: The empirical analysis also emphasizes the role of calibration committees in the development of supervision skills. It has been found that supervisors who skilfully distinguish between the different levels of performance among their subordinates are more likely to get promoted as they demonstrate strong supervisory skills (Grabner et al., 2020). This is in line with the fact that incentives are critical motivators for human capital acquisition, especially when the acquired skills are essential for promotion to higher-ranked positions. The research exhibits the complicated function of promotions as an instrument for motivating supervisory skills, which, in turn, shows that they are a good alternative for rewarding and promoting individuals who have what it takes for advanced roles. The insight thus contributes richness to the ongoing dialogue about good practices that could be utilized to promote skill acquisition and development in the organizational structures.