Purpose – The objective of this empirical study is to apply the methodology commonly used to performance appraisal and examine if outcomes achieved by ratees bias rater's judgment of ratee ethical behavior. Design/methodology/approach – Two studies were conducted: in study 1 the participants...

The empirical support for agency theory explanations for the great variance in CEO pay has been equivocal. Drawing from the performance appraisal literature, we hypothesize that boards of directors incorporate human judgment into the evaluation and reward of CEO performance in order to balance...