(Georgia Institute of Technology, 2022-07-13)
Wu, Suyun
Whereas prior literature has examined how process and outcome accountability affect task performance, in this paper, I experimentally investigate the spillover effects of these accountability requirements on employees’ knowledge-sharing behavior. Because outcome accountability draws attention to task output, employees who produce higher output may be more confident in their performance and, therefore, are more willing to share task-specific knowledge. In contrast, process accountability focuses attention on exploring new task strategies, which may negatively affect short-term output. As a result, employees who engage more in exploration may produce lower output, yet these employees may be more confident in their performance and more willing to share knowledge. As predicted, experimental results show that employees with higher output are more willing to share their knowledge under outcome accountability but are less willing to share knowledge under process accountability. Mediation analysis confirms that employees’ confidence in performance underlies these results. The influences of knowledge sharing on the productivity of coworkers who receive the shared knowledge are also examined.
(Georgia Institute of Technology, 2022-05-02)
Hu, Wenqian
Incentive compensation is often characterized by incomplete contracts. While managerial opportunism has been documented as one of the most pronounced problems with managerial discretion in incomplete contracts, prior work has not investigated the underlying mechanisms driving a loss of productivity. In this study, I experimentally investigate whether replacing human managers’ decision making with algorithm-generated bonus schemes that mimic managers’ decision making improves employee productivity. I find that compensation determined by algorithms generate higher productivity without sacrificing the residual profits. Further, the productivity-inducing effect of algorithms is stronger when the rewards are not contingent on the performance signal. These results are consistent with the idea that it is hard for managers to establish credibility for rewarding employees for their performance in incomplete contracts. Employee productivity can be improved by enhancing their trust in the rewarding mechanism, even when they are not paid a more generous bonus scheme. This study advances our understanding of the behavioral factors influencing employee productivity in incomplete contracts and the potential ways algorithm-based evaluations can be used to improve firm outcomes.
(Georgia Institute of Technology, 2021-06-23)
Kugel, Jonathan
Due to the limits of formal management control systems (MCS) for tasks with unobservable/non-contractible inputs, firms often preferentially select subordinates who exhibit identified motivation (strong perceptions of importance) towards the firm’s mission. While prior literature examines the “crowding out” of identified motivation by formal MCS, less is known about how informal MCS asymmetrically affect subordinates both with and without identified motivation. Given the difficulty in preferentially selecting subordinates with identified motivation relative to those without, I seek evidence of an informal control regime that can best utilize subordinates of all motivation levels. Using the frameworks of Self-Determination Theory and Stewardship Theory, I experimentally test subordinates’ goal congruence and subsequent cooperation with the superior under conventional directives vs “nonformal communications” (unofficial management guidance). Results confirm that informal controls do not crowd out identified motivation yet do impair alignment of amotivated subordinates’ actions to firm objectives.