The Effect of Performance Reporting Frequency on Employee Performance

Research output: Contribution to journalArticlepeer-review

Abstract

Conventional wisdom suggests that frequent performance reporting is beneficial for decision making, as it can enhance timeliness and usefulness of the reported information for decision making. We investigate a potential motivational cost of frequent performance reporting. Using goal orientation theory, we predict and find that frequent performance reporting has negative motivational and performance implications when employees know or assume that the information they report will be used to evaluate their task-related skill. Our theory and results suggest that organizations need to balance the informational benefits and motivational costs of frequent reporting when designing their performance reporting systems. In addition, our theory and results can help organizations begin to design solutions that take advantage of the informational advantage of frequent reporting while minimizing its motivational costs.

Original languageEnglish (US)
Pages (from-to)199-218
Number of pages20
JournalAccounting Review
Volume95
Issue number4
DOIs
StatePublished - Jul 2020

Keywords

  • Avoidance orientation
  • Goal orientation
  • Learning orientation
  • Performance evaluation
  • Reporting frequency

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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