The Implications of Rating Systems on Workforce Performance
通过博弈论模型比较相对评级和绝对评级两种系统，发现绝对评级在小规模或低成本时更优，高能力员工偏好绝对评级，低能力员工偏好相对评级。
Enhancing workforce performance is the key to success for professional firms. Firms often evaluate workers based on their performance compared with their peers or against an objective standard. Which of these rating systems leads to higher workforce performance? To answer this question, we construct game-theoretic models of two performance rating systems: (i) a Relative rating system where workers compete with each other for a constrained number of high ratings, and (ii) an Absolute rating system where workers are awarded high ratings by performing at or above a standard threshold. We derive the workers’ equilibrium performance as a function of their ability and the characteristics of the rating pool. From a firm’s perspective, we find that an Absolute rating system can lead to higher performance than a Relative rating system when the rating pool size is small or the workers’ cost of effort relative to their efficiency rate is low, and the reverse holds true otherwise. When considering the workers’ perspective, we find that higher ability workers prefer an Absolute system due to its predictable nature, while lower ability workers prefer a Relative system as it provides them an opportunity to outperform other workers.