Supporting underperforming agents: The role of human capital development and relative performance information

We study principals’ use of performance information to allocate human capital development resources to underperforming agents. We use proprietary data from a retail firm that sets uniform, noncalibrated performance targets to ensure consistent quality and customer experience across all stores. Unlike calibrated targets, uniform, noncalibrated targets do not account for heterogeneity in local conditions. Given that human capital development is costly, we predict and find that principals do not support all agents who underperform on noncalibrated targets. Instead, they use relative performance information and concentrate support on underperforming agents who outperform their geographical peers. In contrast, for calibrated targets, we find no evidence that principals rely on relative performance; agents who underperform calibrated targets are generally eligible for human capital support. Consistent with our assumption that relative performance is informative about returns to human capital investment, we find that support for underperforming agents who outperform their peers improves performance.

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Publication Details

Journal
Accounting Organizations and Society
Published
2026-08-17
DOI
https://doi.org/10.1016/j.aos.2026.101661
Primary Topic
Consumer Market Behavior and Pricing
Type
article
Field-Weighted Citation Impact
0.00
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article

Supporting underperforming agents: The role of human capital development and relative performance information

Peter Kroos, Jan Bouwens, Jingwen Zhang
Accounting Organizations and Society
Consumer Market Behavior and Pricing
article

Supporting underperforming agents: The role of human capital development and relative performance information

Peter Kroos, Jan Bouwens, Jingwen Zhang
article en

Abstract

We study principals’ use of performance information to allocate human capital development resources to underperforming agents. We use proprietary data from a retail firm that sets uniform, noncalibrated performance targets to ensure consistent quality and customer experience across all stores. Unlike calibrated targets, uniform, noncalibrated targets do not account for heterogeneity in local conditions. Given that human capital development is costly, we predict and find that principals do not support all agents who underperform on noncalibrated targets. Instead, they use relative performance information and concentrate support on underperforming agents who outperform their geographical peers. In contrast, for calibrated targets, we find no evidence that principals rely on relative performance; agents who underperform calibrated targets are generally eligible for human capital support. Consistent with our assumption that relative performance is informative about returns to human capital investment, we find that support for underperforming agents who outperform their peers improves performance.

Accounting Organizations and SocietyVol. 117
College of Accounting (SI), Nyenrode Business University (NL), University of Amsterdam (NL)
Openalex Percentile: Top 6%
Consumer Market Behavior and Pricing
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