Reporting Frequency and Learning by Experience

Abstract

Using an experiment, I investigate whether increasing reporting frequency affects supervisor evaluation decisions and employee experiential learning in a discretionary evaluation setting. Employees learn by either exploring new knowledge or exploiting existing knowledge. Supervisors may be unable to distinguish unsuccessful exploration from shirking as the cause of a low result because exploration frequently produces low outcomes. Anticipating this, employees can explore below optimal levels because they are uncertain whether supervisors will reward their effort. Increasing reporting frequency improves supervisors’ ability to distinguish unsuccessful exploration from shirking. Thus, I predict and find that investing effort in unsuccessful exploration results in higher employee bonuses when reporting frequency increases. Contrary to my prediction, employees do not appear to anticipate this and do not explore more when reporting frequency increases. My results suggest employees can fail to anticipate which actions supervisors will reward, making supervisors less effective at directing employee effort towards desirable actions.

Razvan Ghita
Razvan Ghita
Accounting PhD Student

My research interests include lab and online experiments in the management accounting field.

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