Employee Status, Role Expectation and Performance Evaluation: Evidence from NBA Players

Abstract

This paper shifts attention from how employee status affects work performance to the role of status in performance evaluation when rewards or penalties for performance are determined. While prior studies have shown that high status enables employees to perform well, we emphasize that it may also elevate role expectations, which then become hard to meet. Building on expectation confirmation theory, we argue especially that high-status employees may be less rewarded for their performance because high expectations of them have been established. Although low-status employees are less likely to perform well, they receive greater rewards on attaining success, suggesting a potential advantage to being disadvantaged ex ante. Moreover, while prior literature highlights various benefits of having prestigious peers, we maintain that the presence of high-status teammates also raises expectations of teamwork. As such, employees will be less rewarded for team performance when they work with high-status teammates. We test our hypotheses in a sample of NBA players and find general support. Our findings highlight employees’ status as a potential liability in performance evaluation.