Developmental Role of Negative Feedback

ABSTRACT I develop a model that investigates the developmental role of negative feedback, where a worker can improve his skills after receiving feedback from a supervisor. The supervisor faces a trade‐off: negative feedback promotes skill development, while positive feedback preserves the worker's confidence. The analysis shows that negative feedback is provided when skill development succeeds with sufficiently high probability. A key result is that while the supervisor with higher evaluation ability has stronger incentives to conceal bad news, her higher ability to detect it prevails, implying greater provision of negative feedback. These findings offer managerial implications for mentoring practices.