This paper investigates how narrative feedback affects employee performance. We use archival data from a European e-commerce firm to investigate the effects of the length, level of detail, and causal understanding facilitation of narrative feedback on performance improvement. We find that both higher levels of detail in feedback regarding strengths and more facilitation of causal understanding in feedback regarding weaknesses increase the likelihood of performance improvements. We also find a negative effect of inconsistent signals from ratings and narrative feedback. In additional analyses, we show differing effects for employees who receive positive or negative feedback surprises and differing effects on stronger and weaker areas of performance. Our findings contribute to the accounting literature on feedback by showing which aspects of narrative feedback can help improve future employee performance, thereby advancing our understanding of the types and characteristics that make feedback valuable.

We investigate the effect of overproduction by newly appointed CEOs on employment- and safety-related organizational misconduct. Newly appointed CEOs face performance pressure. To manage their reputation and market expectations, they may engage in overproduction to manage earnings upwards. We predict that such overproduction, in turn, puts employees under pressure, who may respond by “cutting corners” and increasing their workload, resulting in higher organizational misconduct. We further predict that this might lead to changes in social norms within the organization over time, resulting in an increase of future misconduct and a slippery slope, i.e., an increase of the average severity of future misconduct. Controlling for previous levels of misconduct, we find effects con-sistent with our predictions for both the prevalence and severity of future misconduct. Additionally, we find evidence for the presence of a slippery slope. In additional analyses, we show results for situations in which CEO pressure may have a differential effect on social norms.