The Outcome Effect in Performance Evaluation: Decision Process Observability and Consensus.

Abstract The potential effects of outcome knowledge on performance appraisal are examined using a bankruptcy prediction task. Independent variables are outcome knowledge, observability of evaluatee's decision processes, and evaluator-evaluatee-outcome agreement. Study of evaluatee's decision process was motivated by results in agency and control theories, whereas evaluator-evaluatee-outcome agreement has not yet been addressed by researchers studying performance evaluation. Results show that (1) evaluator-evaluatee-outcome agreement interacts with outcome knowledge in affecting performance evaluation, and (2) observability of decision process mitigates the outcome effect.