Search results

1 – 3 of 3
Article
Publication date: 20 August 2018

Ivo Schedlinsky, Friedrich Sommer and Arnt Wöhrmann

In the aftermath of the financial crisis, the influence of competitive compensation systems on employee risk taking has gained increasing attention. As the renouncement of such…

Abstract

Purpose

In the aftermath of the financial crisis, the influence of competitive compensation systems on employee risk taking has gained increasing attention. As the renouncement of such incentive schemes might entail severe disadvantages regarding employee motivation, standard setters have proposed adding nonmonetary instruments of control. This paper aims to examine the influence of two of the most common instruments: a risk-sensitizing code of conduct and justification.

Design/methodology/approach

A laboratory experiment with 136 business students is conducted to test the hypotheses and answer the research question. The presence and absence of a risk-sensitizing code of conduct and a justification system is manipulated between subjects. The experiment consists of ten rounds, with round as the third factor manipulated within subjects.

Findings

Consistent with the paper’s hypothesis and the underlying theory, both instruments are found to offset higher risk taking. The paper shows that the motivation of individuals triggered by justification depends on a risk-sensitizing code of conduct, and insights into the psychological mechanisms behind the findings are provided.

Practical implications

As justification is considered more costly than a risk-sensitizing code of conduct, establishing the latter instead of the former seems preferable in most situations. However, if organizational citizenship behavior is unlikely to evolve, justification can substitute it for managing employee risk taking.

Originality/value

This paper identifies the risk-sensitizing code of conduct as an informal instrument of control for managing risk taking. Prior research mainly focuses on potentially more costly formal instruments of control.

Details

The Journal of Risk Finance, vol. 19 no. 4
Type: Research Article
ISSN: 1526-5943

Keywords

Content available
Article
Publication date: 11 November 2019

Martin Hiebl

Abstract

Details

Management Research Review, vol. 42 no. 11
Type: Research Article
ISSN: 2040-8269

Article
Publication date: 6 December 2021

Christian Schnieder

This paper provides an overview of the empirical findings on how relative performance information (RPI) affects employee behavior. Additionally, the review identifies future…

1154

Abstract

Purpose

This paper provides an overview of the empirical findings on how relative performance information (RPI) affects employee behavior. Additionally, the review identifies future research opportunities based on a systematic analysis of the literature that incorporates findings across several disciplines and provides replicable, extensive coverage.

Design/methodology/approach

This paper addresses a research gap via synthesis, drawing on the empirical literature identified and analyzed systematically. A conceptual framework is developed to integrate the studies.

Findings

The effect of RPI on performance through enhanced effort is positive; moreover, publicity and performance-dependent compensation strengthen the effect. However, RPI has also been found to increase sabotage among employees, and it can lead to less honest reporting. Future research could examine critical mediators and moderators of the RPI-performance relationship and thus complement the findings. Additionally, the effects of group-based RPI remain underrepresented. Future work could help to assess in greater detail how RPI interacts with culture and norms and whether RPI is due to personal expectations. There is also room for further research regarding the effects of RPI on cooperation, its consequences for learning, how it affects budgeting decisions and its implications for risk taking.

Originality/value

This paper presents the first literature review in the field of RPI. It provides synthesized knowledge about whether RPI is beneficial or detrimental to organizational performance.

Details

Journal of Accounting Literature, vol. 44 no. 1
Type: Research Article
ISSN: 0737-4607

Keywords

1 – 3 of 3