From Words to Actions: The Impact of Specificity and Causality in Narrative Feedback on Employee Performance Improvement

Abstract

With the widespread use of narrative feedback in companies, understanding how such feedback can be valuable for employee performance improvement is important. Drawing on proprietary data from an e-commerce company, we investigate the role of language specificity and causality – two key language characteristics relevant to self-regulation and learning. Our findings suggest that the effects of specificity and causality differ depending on whether the feedback refers to strengths or weaknesses. Specifically, employees are more likely to improve when they receive more specific narrative feedback on their strengths, consistent with employees engaging in more systematic exploration when feedback refers to many desirable behaviors. In contrast, we find that increases in the specificity of narrative feedback on weaknesses can have negative performance consequences, which aligns with unsystematic exploration when the feedback refers to many undesirable behaviors. Furthermore, in line with employees gaining a better understanding of why certain behaviors were undesirable, employees are more likely to improve when narrative feedback on their weaknesses contains a higher degree of language causality. In additional analyses, we find evidence consistent with supervisor characteristics moderating the relation between language causality and employee performance improvement. Overall, this study provides novel empirical insights into the types and characteristics that make feedback valuable.

Daniel Schaupp

Assistant Professor of Strategy and Managerial Accounting

My research interests include performance evaluation, feedback, incentives and the impact of new digital technologies on management control.