Carolyn Deller

Research interests: management accounting and control systems, performance measurement, organizational design, chain organizations

• Joseph Moran, Carolyn Deller, Shawn Kim (Working), Emissions Target Design and Choice of Emissions Management Controls.
• Carolyn Deller, H. Eyring, S. Li, L. Stice-Lawrence (Working), Textual Feedback as a Control Mechanism: Evidence from Patient Comments.
• Carolyn Deller (2023), Beyond Performance: Does Assessed Potential Matter to Employees’ Voluntary Departure Decisions?, Journal of Accounting Research, 61 (4), pp. 981-1024. Abstract

  Firms are increasingly implementing performance–potential assessment systems, whereby supervisors evaluate employees’ current performance and future-oriented potential (i.e., promotion prospects). Whether retention is greatest for high performance–high potential (HiPo) employees under such a system is an empirical question—while the “promise” of a promotion may aid retention, these employees likely face attractive outside options. Using data from a multinational firm, I find that HiPos generally depart at a lower rate than lower performing non-HiPos. Among shorter tenured employees, I find the strongest evidence that potential matters to departures, above and beyond performance. In several instances, the rate of departure is lower when assessed potential is higher, holding performance constant. This is the case both among higher performers, where high potential leads to HiPo status, and among lower performers where high potential affords no such status. My findings suggest that HiPo status and potential ratings may help in facilitating employees’ early sorting decisions.

• Carolyn Deller and Santiago Gallino (Working), Pay for Quantity or Time? Implications for Work Speed and Quality. Abstract

  We examine how paying workers a fixed amount for a pre-specified quantity of work vis-à-vis paying workers a fixed amount for a pre-specified amount of time for a quality-focused task affects the time spent per unit of work and the quality achieved. Across two experiments, we find no evidence—contrary to our expectations—that workers paid for a set quantity of work spend less time on each unit (i.e., work faster) than workers paid for a set amount of time. In fact, in our second experiment, we find workers paid for a set quantity of work spend more time on each unit on average. These workers also achieve greater quality. These findings, together with the worker outcomes we observe when workers are told what is valued (quality, speed, or both), are consistent with the idea that the design of fixed compensation schemes can influence employee effort and performance, despite no compensation consequences, by implicitly communicating what is valued.

• Carolyn Deller, Christopher D. Ittner, Hami Amiraslani, Thomas Keusch (Working), The Importance of Directors’ Information Access: Evidence from Board Risk Reporting.
• Carolyn Deller, S Leonelli, Artz, M. (Working), You Rate Me and I’ll Rate You: Mutual Rating Relationships in Multi-Rater Performance Evaluation Systems. Abstract

  We examine rating behavior in multi-rater performance evaluation systems. Specifically, we study mutual rating relationships, where two employees rate each other contemporaneously. We use proprietary data from an online retailer and show that demographic similarity and organizational proximity are positively associated with the likelihood of a mutual rating relationship. Mutual ratings are higher on average than one-sided ratings; both selection in relationship formation and strategic rating behavior drive this premium. While rater nominations are more likely to be approved by supervisors if they would result in a mutual rating relationship, we find those supervisors who use their discretion to veto mutual rating relationships place less weight on mutual ratings vis-à-vis one-sided ratings when arriving at their employee assessments. Overall, our study offers first evidence on a phenomenon inherent to multi-rater systems: mutual rating relationships

• Carolyn Deller and Jeremy Michels (Working), The Effect of Weather on Subjective Performance Evaluation. Abstract

  We examine how a specific external and uncontrollable factor—the day’s weather—affects subjective performance evaluations. We use an experiment to test how weather influences biases that the prior management accounting literature shows affect subjective evaluations. First, we examine if weather introduces a directional bias to subjective evaluations. Next, we explore if weather leaves individuals more prone to other decision biases. Contrary to popular belief, we find no evidence that sunny weather results in more positive (i.e., lenient) evaluations. However, we find evidence that weather influences a bias documented in the prior literature, the spillover effect. Specifically, we find this bias is significantly less pronounced on cloudy days relative to sunny days in geographic locations where the weather is more likely to influence evaluators.

• Carolyn Deller, Pablo Casas-Arce, Francisco de Asis Martinez-Jerez, Jose Manuel Narciso, Knowing That You Know: Incentive Effects of Relative Performance Disclosure. Abstract

  This paper studies differential employee responses to the public disclosure of individual performance information throughout an organization. We argue that, to the extent that employees care about their colleagues’ perceptions of their productivity, public disclosure will increase motivation. Moreover, the effect should be stronger for employees whose colleagues expect them to have higher performance. We obtained data from a bank that transitioned from private to public disclosure of employee rankings and, consistent with our hypothesis, find heterogeneity in employee responses to public disclosure. Employees with a history of poor performance increase their output more than past good performers when rankings become public. Additionally, more highly educated employees react more strongly to the change. However, contrary to the literature that finds gender differences in competitive environments, we do not find systematic differences in the response to public disclosure on this dimension. Overall, the results suggest that public disclosure is an important dimension to consider when designing a compensation system.

• Carolyn Deller, Christopher D. Ittner, Hami Amiraslani, Thomas Keusch (Working), Board Risk Oversight and Environmental and Social Responsibility. Abstract

  We study the relation between board risk oversight and environmental and social (E&S) performance. Our quest is motivated by heightened awareness about E&S risks and growing calls for their inclusion in the purview of board risk oversight. Using a novel proprietary dataset on board risk oversight for an international sample, we find that firms with more extensive board risk oversight are more likely to institute E&S compensation, set environmental (but not social) targets, adopt policies that address E&S risks and opportunities, and issue an E&S report. Our exploratory evidence also shows that more extensive board risk oversight is associated with better environmental outcomes, specifically lower monetized environmental costs, but worse social outcomes, namely lower monetized employee benefits and a higher likelihood of social risk incidents. Further analyses indicate that E&S risk incidents materialize when boards focus on mitigating financial risks, suggesting that risk oversight is plausibly analogous to a constrained optimization problem whereby risk exposures are prioritized and receive different degrees of oversight consideration by the board.

• Carolyn Deller and Tatiana Sandino (2020), Who Should Select New Employees, Headquarters or the Unit Manager? Consequences of Centralizing Hiring at a Retail Chain, The Accounting Review, 95 (4), pp. 173-198. Abstract

  We examine how changing the allocation of hiring decision rights in a multiunit organization affects employee-firm match quality, contingent on a unit’s circumstances. Our research site, a U.S. retail chain, switched from a decentralized hiring model (hiring by business unit managers—in our case, store managers) to centralized hiring (in this study, by the head office). While centralized hiring can ensure that enough resources are invested in hiring people aligned with company values, it can also neglect the unit managers’ local knowledge. Using difference-in-differences analyses, we find that the switch is associated with relatively higher employee departure rates and, thus, poorer matches if the business unit manager has a local advantage; that is, if the store serves repeat customers, serves a demographically atypical market, or poses higher information-gathering costs for headquarters. In these cases, the unit manager may be more informed than headquarters about which candidates best match local conditions.

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Past Courses

• ACCT1020 - Strategic Cost Analysis

  Strategic Cost Analysis is the process of analyzing and managing costs in order to improve the strategic position of the business. This goal can be accomplished by having a thorough understanding of which activities and costs support an organization's strategic position and which activities and costs either weaken it or have no impact. Subsequent cost management efforts can then focus on reducing or limiting expenditures on activities that add little or no strategic value, while increasing expenditures on activities that support the strategic position of the organization. Performance can then be evaluated to ensure that the chosen actions are taken, and that these actions are yielding improved strategic performance. Throughout the course, a strategic cost analysis and management framework will be applied across functions and organizations to highlight the cost analysis and performance evaluation methods available to forecast financial performance and improve strategic position.

• ACCT9400 - Research in Acct I

  This is Part I of a theoretical and empirical literature survey course covering topics that include corporate disclosure, cost of capital, incentives, compensation, governance, financial intermediation, financial reporting, tax, agency theory, cost accounting, capital structure, international financial reporting, analysts, and market efficiency.

Management Science Excellence in Reviewing Award, 2023
Dorinda and Mark Winkleman Distinguished Faculty Scholar,
2022-2023, 2023-2024
MAS Best Early Career Researcher Award, 2022
FARS Excellence in Reviewing Award, 2022 FARS Mid-Year Meeting
Wharton Teaching Excellence Award, 2021, 2020
MAS Outstanding Reviewer Award, 2021 MAS Mid-Year Meeting
MAS Outstanding Reviewer Award, 2020 Annual Meeting
MAS Best Dissertation Award, 2019

Knowledge @ Wharton

• Building Stronger Family Offices by Sharing Knowledge and Securing the Future, Knowledge @ Wharton - 11/21/2024
• State of the NBA with Seth Partnow, Knowledge @ Wharton - 11/20/2024
• How Are Companies Really Using AI? A New Report Has Answers, Knowledge @ Wharton - 11/19/2024
• Impact vs. Time: A Leader’s Guide to Slow Productivity, Knowledge @ Wharton - 11/19/2024
• Kevin O’Leary Illustrates the Benefits of Tariffs for U.S. Businesses, Knowledge @ Wharton - 11/19/2024
• Boosting Donations Through Self-expressive Choices | Jonah Berger, Knowledge @ Wharton - 11/19/2024
• Why Are Hospitals So Expensive?, Knowledge @ Wharton - 11/18/2024
• New Phenomena in Behavioral and Social Investing, Knowledge @ Wharton - 11/18/2024
• Bigger Hospitals, Better Care? Wharton Research Finds Benefits Are Only at the Operational Level, Knowledge @ Wharton - 11/14/2024
• Linda Dow Cash, CEO, Two Chicks Cocktails, Knowledge @ Wharton - 11/14/2024