The Impact of Organizational Structure and Employee Traits on Peer-Based Internal Evaluation Systems : An Empirical Investigation

Modern companies are beginning to see merit in real-time peer-based performance appraisal as its ability to capture continuous dialogue interactions and real-time feedback within the employee network becomes relevant in the context of current and innovative corporate performance management practice. An ongoing socially-based performance management system relies on real-time continuous feedbacks from employees to capture the view of an employee's performance and behavioral attitude from the people the employee works with on a regular basis. This study examines the potential impact of external organization structure and internal employee traits on employee peer evaluation ratings. In particular, we investigate the efficacy and consistency of multi-round employee peer-to-peer evaluation in a multidimensional context by using a comprehensive set of real-time peer feedback data across a period of 121 days obtained from DevelapMe, a real-time feedback application. The empirical results suggest that organizational structural factors such as geographic proximity between rater and ratee and team size and employee personal traits such as organizational culture profile and organizational competency categories significantly impact peer evaluation ratings after controlling for time-invariant unobserved characteristics. Moreover, we find that the sentiment of textual review and the frequency of review occurrence diminish the consistency and reliability of the peer performance ratings. Our study provides new insights into manager perception of interpreting employee assessment and implementing related operational strategies; the findings also offer guidelines for designing continual objectives and incentives for future performance management systems