Do first impressions last? The impact of initial assessments and subsequent performance on promotion decisions

This paper examines supervisors’ use of performance measures to update initial beliefs about employee ability over time. Using archival performance and job assignment data, we examine the weighting for promotion decisions of assessments made before employees begin working, and objective performance data collected over time. We find strong evidence that employers’ initial assessments about employee ability predict workers’ future career attainment. While we find evidence consistent with employers using objective performance measures to update expectations about employee ability and sort employees into appropriate job roles, we also find that, controlling for current and prior objective performance measures, managers continue to rely on initial assessments for promotion decisions up to six years later. Managers’ weighting of objective performance measures in promotion decisions appears justified in our setting based on a strong association between current (and past) performance and future performance. However, after the first year, initial assessments of ability have no predictive value for future performance. Thus, it appears managers in our setting over rely on initial impressions, long after they are useful for sorting employees on ability. We also document that supervisors differentially weight objective performance measures based on whether realized performance is consistent with or contrary to initial assessments of ability. Prior research has documented career “fast tracks,” whereby firms identify high-quality employees early and promote these workers quickly. Our findings suggest that workers may be placed on fast tracks even before they start working and are promoted more quickly, at least in part, due to biased performance evaluations and not on merit alone. JEL Classifications: G30; M41; M51; M54