Outcome effects: The impact of decision process and outcome controllability

Abstract

An 'outcome effect' refers to the phenomenon whereby performance evaluations of decision makers are affected by the outcomes of those decisions. Although some consider such an effect to be a judgmental error, judgment by outcomes may not be dysfunctional when the evaluator does not know how the decision maker chose his or her action. In such situations, outcomes may provide some noisy information about decision quality. We test whether an outcome effect will still occur when the decision methodology and quality are more explicitly identified. Further, we test whether outcome controllability, a previously unexplored moderator variable, will have an impact on the outcome effect. Our first experiment, using undergraduates as subjects, shows that decision quality and controllability have an impact on performance evaluations but that the ubiquitous outcome effect still obtains. These results were replicated with experienced business people, except that controllability only affected their judgments in the case of negative outcomes. Implications of these results are discussed. © 1997 John Wiley & Sons, Ltd.