Demand-Driven Feedback: Effects on Evaluations of Performance and Potential
Contrary to traditional supply-driven feedback systems, in demand-driven feedback sys-tems, employees receive performance feedback only upon request. The feedback request and the feedback employees receive provide information to supervisors, who can use this information when subjectively evaluating employee performance and potential. Drawing upon the feedback-seeking literature, I predict that high performers are more likely to re-quest feedback in a demand-driven feedback system. I further predict that the feedback is informative for evaluations of performance, and the feedback request is informative for evaluations of potential. Using data from a large European company, I find support for these predictions. My results suggest that firms use demand-driven feedback systems as an additional source of information for evaluation and resource allocation purposes. However, since very few employees request feedback, such systems are likely not effective in supporting the performance development of most employees, and low performers in particular. Solo-authored. Draft available upon request.