SETH Carnahan

By Jesse Austin-Breneman (Michigan) , Seth Carnahan (Washington University in St. Louis, Olin), John Meluso (Michigan), and Jose Uribe (Michigan, Ross).

Abstract

An important challenge for managers is determining subordinates' individual contributions to cooperatively produced output. Guided by the value-based theory of strategy, we posit that managers use worker absences to infer individual contributions to team production. If a team's production improves or declines while a worker is absent, relative to when the worker is present, this pattern may provide managers with important information about the worker's individual contribution to the team’s performance. We find support for this idea using data from a mid-sized manufacturing firm in the United States. Workers receive higher performance evaluations if their team's productivity declines while they are absent from work. This pattern is especially sharp for workers with shorter tenure, where the information provided by absences will be especially valuable for managers.