3 Subjective Evaluation of Performance and Evaluation Interview Empirical Evidence from France. “If the economic organization meters poorly, with rewards and production only loosely correlated, then productivity will be smaller; but if the economic organization meters well productivity will be greater.” —Alchian and Demsetz (1972, 779) | 3 Subjective Evaluation of Performance and Evaluation Interview Empirical Evidence from France Marc-Arthur Diaye Nathalie Greenan and Michal W Urdanivia If the economic organization meters poorly with rewards and production only loosely correlated then productivity will be smaller but if the economic organization meters well productivity will be greater. Alchian and Demsetz 1972 779 Introduction A main contribution of linked longitudinal employer-employee data is to provide a decomposition of wage rates into components due to individual heterogeneity and to firm heterogeneity. In France Abowd Creecy and Kramarz 2002 show that the person effect and firm effect account respectively for 70 percent and 20 percent of the variation of wages. The person-effect component is bigger in France than in the United States where it represents half of the wage variation. This indicates that the devices used by firms to attract or select workers with specific characteristics play a central role in determining the firm s wage structure. However these devices have not been investigated thoroughly by economic analysis. In this paper we are going to assess individual evaluation Marc-Arthur Diaye is an associate professor at the Center for the Study Political Economics at the University of Evry and a research fellow at the Center for Labor Studies. Nathalie Greenan is a researcher at the National Centre for Scientific Research and a research director at the Center for Labor Studies. Michal W. Urdanivia is a PhD student in the Department of Applied Mathematics at the University Pantheon-Sorbonne and a research assistant with the Center for Labor Studies. This paper was presented at the Conference on Analysis of Firms and Employees CAFE 2006 held September 29 to 30 2006 in Nuremberg Germany. We gratefully acknowledge the financial support provided by the Institute for Employment Research IAB the Data Access Center FDZ-BA IAB The Deutsche Forschungsgemeinschaft German Research .
