Explaining the reluctance of managers to

An important task of managers is to motivate employees. One way is to provide feedback on task performance. Performance feedback is generally accepted to improve employee performance. However, research also revealed that managers often fail to provide feedback. The present paper introduces a game-theoretical model that explains the reluctance of managers to provide feedback. If ability and effort are complements, and the employee is effort averse, the manager is generally better off by not providing feedback. Positive feedback may induce the employee to reduce effort if he is more able. And negative feedback may induce the employee to stop participating if he is less able. On the other hand, feedback positively affects performance if it motivates the agent to participate at all.