Title: The effect of evaluation on performance
Description: "The effect of evaluation on employee performance is traditionally studied in the context of the principal-agent problem.  Evaluation can, however, also be characterized as an investment in the evaluated employee's human capital.  We study a sample of mid-career public school teachers where we can consider these two types of evaluation effect separately.  Employee evaluation is a particularly salient topic in public schools where teacher effectiveness varies substantially and where teacher evaluation itself is increasingly a focus of public policy proposals.  We find evidence that a quality classroom-observation-based evaluation and performance measures can improve mid-career teacher performance both during the period of evaluation, consistent with the traditional predictions; and in subsequent years, consistent with human capital investment.  However the estimated improvements during evaluation are less precise.  Additionally, the effects sizes represent a substantial gain in welfare given the program's costs"--National Bureau of Economic Research web site.