Dr. Kari Olsen, assistant professor in accounting, recently published research in the Journal of Management Accounting Research and Strategic Finance with his co-authors Dr. D. Kip Holderness Jr. and Dr. Todd A. Thornock. Looking at the effects of relative performance information, they examined how the effect of relevant performance feedback might vary depending on if it was given by a manager or requested by an employee. They hypothesized that when relevant performance feedback is given by a manager, employee performance would initially increase with more frequent feedback, but would ultimately reduce performance if given too frequently. In contrast, they also hypothesized that when relevant performance feedback is chosen by employees, performance would steadily increase with more frequent feedback requests due to individuals placing greater weight on chosen feedback than assigned feedback.

“The idea for this project began when my co-authors and I noticed trends in the workplace and the business press. We observed numerous articles in the Wall Street Journal and other sources talking about performance reviews and how they are changing. The annual performance review is declining, while more frequent, less formal feedback is taking its place. Furthermore, several companies have developed software to help managers and employees communicate about performance more frequently. Another element of these systems is up-to-date performance tracking measurement. One key feature of these systems is the employees’ ability to choose to view performance feedback. Our research looks at how the choice of feedback frequency affects employee performance.

Our project received a research grant from the Institute of Management Accountants (IMA) Research Foundation. The project was undertaken with two outcome goals. First, to publish an academic article, which we did in the Journal of Management Accounting Research. This helps my co-authors and I for tenure and promotion in our academic positions. Second, a practitioner version of the paper to highlight key takeaways that practicing managers and accountants can benefit from. We did this with the Strategic Finance article, which is the monthly magazine sent to the IMA’s approximately 140,000 members — so it has broad distribution.

We conducted a business laboratory experiment at two large public universities, with 500 college student participants. From this study, I learned the important role that choice of feedback frequency has. Performance feedback frequency has traditionally been assigned by a manager. While this can be effective, too frequent feedback can actually hurt performance. That by itself was a somewhat understood phenomenon. The cool part of our study is we introduced the choice angle and found that its effect is very different.

I’m happy with the dual-article model — meaning we were able to publish an academic article in a well-respected journal that requires an intense peer-review process while also publishing a practitioner article to help connect academia to practice. This research can be utilized by managers who design performance feedback systems. It also affects employees who use the performance feedback system. Our key findings are that when performance feedback frequency is assigned by a manager, some feedback helps, but too frequent feedback hinders performance. Also, when performance feedback frequency is chosen by an employee, the more feedback the better. Employees place more weight on chosen feedback than assigned feedback.”