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Jensen and Murphy (1990) and others have found a small but statistically significant relationship between firm performance (as measured by change in shareholder wealth or firm profits) and executive compensation. In this study we investigate the pay‐ performance relationship further by considering the relationship between an outside measure of firm performance (changes in the firm's bond rating) and the contemporaneous change in the compensation of the firm's CEO. We find that when a firm's bond rating is down‐graded, CEO total compensation declines by a relatively small amount ($165,500) and when a firm's bond rating is upgraded, CEO total compensation increases markedly ($3,202,900). Thus, while a positive pay‐performance relationship exists, the relationship is not symmetric. CEO compensation changes (increases) much more when firm performance improves than it changes (decreases) when firm performance declines. Further, most of the change in CEO compensation occurs in the stock gains (profits from the exercise of stock options) category for both firms experiencing bond rating upgrades and down‐grades.

The purpose of this paper is to examine the risk-adjusted performance of rated funds and determine the usefulness of Lipper Leader rating of unit trusts in Malaysia during the period 2000 to 2010.

The paper utilizes the Sharpe ratio, Treynor ratio, Jensen’s alpha and Fama-French three-factor model to measure performance.

During the period of study, the performance of the market index and risk-free rate outperformed that of 68 equity unit trust funds in the 3-year, 5-year and 10-year investment horizons. The ranking, based on four performance measures, corresponds to Lipper rating for the lowest rated and leader funds, but not for the three- and four-key rated funds. Further, there is a significant difference in the performance of the five-key, four-key and three-key rated funds which outperform the lowest rated funds, indicating that Lipper rating is able to distinguish superior and inferior unit trust funds.

Some of the limitations in this study are that the indexes could be self-constructed. The existing index might not represent the asset allocation of the funds concerned. Additional variables might have to be considered when examining fund performance as they should correspond to the characteristics of a fund.

The results indicate that Lipper rating classification could identify the highest and lowest performing funds. Therefore, investors could use this rating to make informed investment decisions without undertaking time-consuming analysis to ascertain the good- and bad-quality funds in the market.

The findings of this study could be used by the academia as another source of reference to enhance their understanding of the applicability of Lipper rating for unit trust funds in an emerging market.

The contribution of this study is that it analyzes the effectiveness and capability of Lipper Leader rating in identifying quality funds in the context of an emerging market. Performance comparison between Lipper Leader rating and methods used in the portfolio theory bridges the theory-practice gap between practitioners and academics. To date, there have been no attempts to study and compare the ratings of advisory firms with theoretical performance measures, particularly in the context of Malaysia.

The purpose of this paper is to examine whether agreement between frontline employee self-ratings and supervisory ratings of service performance functions as an indicator of healthy supervisor-subordination relationships above and beyond what might be indicated simply by either supervisory ratings or self-ratings.

Research hypotheses were tested using a sample of 220 matched pairs of frontline service workers and their immediate supervisors from nine full service hotels in the USA.

The results show that higher levels of agreement in service performance ratings between employees and supervisors is associated with higher levels of leader-member exchange (LMX) and organizational commitment.

Senior managers can refer to the level of performance rating agreement between customer service employees and their supervisors in assessing supervisors’ competency to manage their work relationship with their subordinates.

This study examined rating agreement in a service performance context and found rating agreement between subordinates and their supervisor may have a unique effect on service worker effectiveness, producing a unique incremental effect on LMX and organizational commitment. This is important given that few attempts have been made to examine service performance from both subordinates’ and supervisors’ perspectives and the implication that rating agreement may have for improving employee service performance.

This study is an academic attempt to bridge the gap between Western theories and the under-researched non-western contexts by studying the characteristics of traditional and modern performance management systems (PMSs) in the United Arab Emirates (UAE). Drawing on the expectancy theory, this study aims to discuss the significant causal relationship between the implementation of single-rating, multi-rating 360° performance management (PM) and organizational outcomes such as trust, commitment, satisfaction and intention to leave.

Using the self-reported measures and survey method, data were collected from 439 employees from different organizations across the UAE. Explanatory factor analysis, simple linear regression and multi-group were used to test the proposed conceptual model and examine the mediation and moderation impact.

The study explored the best-practices attributes of the traditional single-rating, multi-rating 360° PM within a non-western context. This study also provides empirical evidence on the significant role of uncertainty avoidance and power distance orientation as a mediator between the relationship between these PMSs and trust, commitment, job satisfaction and intention to leave. Finally, this paper examined the effect of many demographic variables (such as gender, age, industry type […]) on the relationship between the independent variables and the dependent variables.

This study extends research on PM theories and models. Another important aspect of this study is that its model has been tested on the UAE’s data, an underrepresented geographic region in the management literature. Given all the PM’s positive characteristics, the way that this feedback is viewed and interpreted by employees may be moderated according to the employee’s management level, age, gender and many other demographics.

Recent performance appraisal (PA) literature suggests that alongside cognitive biases, rating distortions may stem from rater disposition and PA context. The study investigated the role of social value orientation (rater disposition), PA purposes and rater accountability (PA context) toward rating distortions at both performance levels, i.e. good and poor.

The authors designed an experimental study and elicited data from N = 110 undergraduate students about two video-taped performances of good and poor performers. In these videos, two managers conducted assessment interviews of two different employees for the job of a sales representative at an information technology organization. To ensure the validity of performance ratings, the authors invited 10 senior managers to provide benchmark ratings of the video-taped performances. While being placed in two separate groups, the study participants gave performance ratings on both the video-taped performances. The authors used repeated-measures analysis to analyze data.

The results revealed that rating distortions took place not because of rater social value orientation, but the PA context. Different rating distortion patterns emerged for different levels of ratees' performance.

This study’s findings furnish new insights for assessing rating distortions for poor as well as good performers. Moreover, the results support previous findings that for good performers, accountable raters are tempted toward accurate ratings and refrained from deflation. Similarly, for poor performers, accountable raters do not inflate ratings. The findings will open research avenues to examine the role of PA purposes in rating distortions for different performance levels.

In recent years, practitioners have identified a number of problems with traditional performance management (PM) systems, arguing that PM is broken and needs to be fixed. In this chapter, we review criticisms of traditional PM practices that have been mentioned by journalists and practitioners and we consider the solutions that they have presented for addressing these concerns. We then consider these problems and solutions within the context of extant scholarly research and identify (a) what organizations should do going forward to improve PM practices (i.e., focus on feedback processes, ensure accountability throughout the PM system, and align the PM system with organizational strategy) and (b) what scholars should focus research attention on (i.e., technology, strategic alignment, and peer-to-peer accountability) in order to reduce the science-practice gap in this domain.

The purpose of this paper is to examine relationships between a priori‐chosen personality traits and the tendency for a manager to rate his/her job performance more favourably than well‐acquainted superiors, peers, and subordinates do.

The job performance of 204 managers was evaluated using multi‐source (i.e. 360E) ratings (self, subordinates, peers, and superiors). Managers also completed personality measures. Relationships between managers' personality and the tendency for managers to rate their own job performance higher than subordinates, peers, and superiors did were analyzed using advanced regression techniques.

The paper finds that self‐superior and self‐peer disagreement in performance ratings (i.e. self‐rating inflation) was associated with high Achievement and high Self‐Esteem. Additionally, self‐superior disagreement (i.e. self‐rating deflation) was associated with high Anxiety. Self‐subordinate disagreement was not associated with self‐rater personality.

The paper studied a single sample of financial services managers. Generalization requires cross‐validation with other occupational groups and organizations.

Human resources professionals should be informed that self‐superior and self‐peer disagreement (i.e. self‐rating inflation) in multi‐source job performance ratings is potentially beneficial because it is associated with personality traits that can facilitate positive responses to feedback. Peers and superiors should therefore not inflate their ratings of managers in an effort to reduce self‐superior and self‐peer disagreement in ratings.

This study improved upon most previous investigations of this topic by using a field setting, considering a wider range of personality variables, using 360( job performance ratings (self‐, supervisor‐, peer‐, and subordinate‐ratings) rather than just a subset of these rating sources, and employing superior statistical procedures.

This paper aims to investigate the impact of sovereign rating and corporate governance on performance of Latin American companies between 2004 and 2018.

This study performed a multilevel regression with fixed and random coefficients for 823 companies and verified the impacts of country, firm and time levels on the performance variation. The study alternated return on assets and Tobin’ Q as dependent variables and measured governance using the following variables: board size, chief executive officer/chairman duality, CEO/board member duality, dummy for the chairman as a former CEO, audit committee, independence and expertise of the audit committee.

Latin American companies performed better when their respective countries have a better sovereign rating and when they adopt better board of directors and audit committee mechanisms. Sovereign rating assumes distinct roles depending on the presence or absence of governance variables. Rating and governance may be substitute mechanisms to protect investors.

To the best of the authors’ knowledge, this paper is the first to investigate the impacts of sovereign rating on firm performance in the Latin American scenario. The use of governance metrics – for example, the audit committee expertise and the dummy for chairman as a former CEO – is innovative in Latin American studies.

The purpose of this paper is to investigate the relationship between a company’s environmental, social and governance (ESG) performance and its financial performance. This paper also investigates the relationship between ESG performance and a company’s market valuation. This paper provides convincing empirical evidence that delivering superior ESG performance pays off financially.

The financial data and ESG scores of 150 publicly traded companies listed in the Standard and Poor’s 500 index for 2017–2020, comprising 5,750 observations, were collected. STATA was used to run a fixed-effect regression and a weighted least squares model to analyze the panel data.

The results of the empirical analysis suggest that companies with superior ESG performance perform better financially and are valued higher in the market compared to their industry peers. The ESG rating score impacts both return-on-capital-employed as a proxy for financial performance and Tobin’s Q as a proxy for the market valuation of a company.

This study contributes to the existing research on ESG performance and financial performance relationship by providing empirical evidence to resolve confusion in the existing literature caused by contradictory evidence. Taking advantage of worldwide crisis caused by the COVID-19 pandemic, this study shows that a positive relationship between ESG performance and a company’s market valuation holds even during times of unexpected crises. Further, this study contributes to business practitioners’ knowledge by showing that ESG aspects constitute highly relevant non-financial information that impact the market’s perception of a company and that investing in sustainability positively impacts a company’s bottom line.