Supervisor-employee relationships are a core element of management control systems. Drawing on financial data as well as 243,754 ratings from an employee review platform, we find that performance pressure has a negative effect on employees’ perception of supervisor behaviour. Exploiting tariff changes as exogenous shocks to performance pressure, we find support for a causal effect of performance pressure on supervisor ratings. Moreover, we use textual analysis to identify different types of supervisor behaviour from the reviews. We find that some supervisors’ emotionally intelligent behaviours (such as being respectful and listening) mitigate the negative effect of performance pressure on supervisor ratings. However, at the same time, they strengthen the negative impact of the exogenous shock on firm performance.

Other authors: Wei Cai, Columbia Business School; Fan Wu, Frankfurt School of Finance & Management