How do Managers Use Situational Information?

Basic Research Question Addressed

The author addresses questions related to managers’ use of situational information in evaluating business performance. He does this, by conducting a research experiment based on managers’ abilities as well as their performance and its effects on situational information.

Importance of the question

This question helps in understanding the best way managers can evaluate performance, and gives in-depth information on when and where situational information is useful to managers as well as outcome effects. He emphasizes the fact that when financial outcomes become unfavourable, managers tend to use outcome effects rather than situational issues.

Theoretical Under prints

According to Rose, theories such as those proposed by Reeder and Brewer as well as Skowronski and Carlston show that high ability is usually indicated by favourable outcomes while unfavourable factors are always indicative of either high or low abilities (attribution theory). Although studies demonstrate that outcome information usually determines abilities and judgments, the author believes that situational factors are also crucial in performance evaluation.

Major hypothesis

As cognitive load is increased, situational factors will have less influence on performance evaluation. This hypothesis is major because it forms the basis of an experiment that was conducted with a focus on the influence of situational factors on managers.

Method: Design, Task, Subjects, Experimental procedures

The author uses various credible sources to back his research. These sources range from authors such as brown and Solomon, among others. The method used involves a measure of cognitive load in which the evaluation score is plotted against the situational score and the curves show the outcomes observed.

The method involves the evaluation of eight managers’ performance by selected subjects based on financial data that is budgeted. These subjects are executive MBA graduates, and 101 in number with an average age and experience of 30 and 7.5 years respectively. This was reduced to 97, for a conclusive experiment.

They are related to allied situational and financial outcomes. Four situational factors are used with each manager briefed on them. They included no, neutral, outcome inhibiting and outcome facilitating factors. During performance evaluation, these subjects are placed in either high or low cognitive load conditions. Demographic questionnaires are then filled by the subjects based on their evaluation along with performing free recall duty for situational factors.

Dependent and independent variables

According to Rose, in concurrent task manipulation, the independent variable is situational factors, which range from none, neutral, inhibiting to, facilitating. On the other hand, we have a dependent variable that shows the evaluation scores. These variables have been utilized to illustrate the relationship between situational factors and outcome effects on high and low cognitive loads, in a process known as split attention manipulation.

V and Z controls

Experiment on outcome effects indicates approval for attribution theory which states that unfavourable financial outcomes are indicative of high or low abilities. On the other hand, experiments on causes of outcome effects show that the recall effect is better in favourable than unfavourable financial outcomes.

Statistical Analysis: Comparisons Made and Tests Performed

The article provides information based on conducted research by other authors as well as its investigation. This gives Rose the ability to compare evidence and ideas from other researchers like Kelly with the study conducted, to arrive at a conclusion.

Key Findings and Implications

Key findings show that situational factors rarely influence judgments of abilities and performance. Rather, favourable outcomes more often signify high ability. It is also found that evaluators usually utilize the Kelley principle (discounting) whenever the outcomes are unfavourable. This affects a manager’s ability to use situational factors in evaluating performance and ability.

Limitations

Limitations are encountered in this research method when there is cognitive loading. Because it encumbers memory thereby splitting attention, this has the effect of inhibiting better analysis.

Opportunities for Future Research

This research was conducted to investigate the influence of situational factors on a manager’s evaluation. In the process, it opens an opportunity for further research on whether situational factors should take centre stage in the evaluation of abilities or performance.

Conclusion

The article gives credible Information backed by dependable sources as well as evidence-based research and experiment showing that managers tend to use outcome effects rather than situational issues, especially when financial outcomes are unfavourable. Moreover, in favourable financial conditions, evidence has shown, according to this article, that situational factors do take centre stage in performance evaluation. The article is well documented with clear and concise pieces of evidence relating to the use of situational information.