Automated processes take over more and more tasks from humans. This is also the case in Performance-related pay (PRP) systems. The objective of this paper is to examine if performance is influenced by the usage of an automated PRP system and whether it matters if an authority, i.e., the company, or the line manager decides to use the automated performance appraisal system. We analyze the consequences of an automated PRP and a manual PRP system on performance (productive activity) in an experimental principal-agent game, where the principal can choose an appraisal system.
Presented at: 11th IMPRS Uncertainty Thesis Workshop