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Article
Publication date: 18 May 2021

Michael Robinson and Maia Farkas

There is a longstanding debate regarding the effectiveness of financial incentives in improving work performance. This study is motivated by seemingly conflicting theory…

Abstract

Purpose

There is a longstanding debate regarding the effectiveness of financial incentives in improving work performance. This study is motivated by seemingly conflicting theory and mixed research evidence, and advances the management accounting literature on pay-for-performance by examining the separate and joint effects of task attractiveness and monetary incentives on allocation of effort and on performance.

Design/methodology/approach

This study uses an online, multi-period, mixed design experiment with two independent groups of participants who receive either incentive pay or flat pay to perform a multidimensional job. The job tasks differ in complexity and participants can choose how to distribute effort between tasks. Observations are taken across two periods.

Findings

If the complex task is initially viewed as attractive it becomes less attractive over time, while the attractiveness of the simple task is stable. Participants who receive flat pay and who find the complex task attractive spent more time on working on that task than those compensated with incentives. Incentives caused higher initial performance than flat pay among participants who find the complex task to be attractive, but the differential is transient; dissatisfaction with initial performance seemingly contribute to a decline in attractiveness and deterioration in performance.

Research limitations/implications

The results indicate that task attributes and personal preferences moderate the effects of incentives on performance and that further research is needed to examine strategies to mitigate spillover effects of deficient performance to subsequent periods. However, the findings may not be applicable to extremely complex work environments involving numerous tasks and/or group work.

Practical implications

Showing that incentives may have a positive but transitory effect on performance, because task attributes and personal preferences moderate the incentive-performance relationship, may have practical implications for hiring, job design and compensation systems design.

Originality/value

This paper contributes to the literature on pay-for-performance by using a setting that better represents contemporary work environments than prior studies have and introduces choice over effort allocation. Additionally, we contribute to theory by showing that economics and psychology theories should be viewed as complements in investigating the intricate relationship between incentives and performance.

Details

Journal of Applied Accounting Research, vol. 22 no. 5
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 16 April 2020

Grant Beck, Maia Farkas, Patrick Wheeler and Vairam Arunachalam

This study extends prior accounting research on decision aids (DAs) relating to face validity. Specifically, this study aims to examine the effects of face validity…

Abstract

Purpose

This study extends prior accounting research on decision aids (DAs) relating to face validity. Specifically, this study aims to examine the effects of face validity through the presence of two levels of bias in DA output. The presence of bias in a DA will not affect how statistically informative an aid is but will decrease the face validity. The findings suggest that non-expert DA users recognize the bias in the DA’s suggestions as evidenced by users’ low agreement with the aid; however, they do not adjust for the bias in their performance, suggesting that non-expert users do not learn from the DA.

Design/methodology/approach

This repeated-measures experimental design allows us to examine performance effects over time in response to different levels of bias in the DA output. The participants in the study are provided with outcome feedback to examine learning effects.

Findings

The findings suggest that non-expert DA users recognize the bias in the DA’s suggestions as evidenced by users’ low agreement with the aid; however, they do not adjust for the bias in their performance, suggesting that non-expert users do not learn from the DA. Although users of an unbiased DA strongly agree with the DA’s output, individual performance deteriorates over time. Initially, the users of an unbiased DA perform better than those who use a biased DA; however, over time, the performance of users of an unbiased aid deteriorates and the performance of users of the biased aid does not improve.

Practical implications

Companies developing DAs may need to consider the effects of using a DA under circumstances different from those under which the aid was developed and that may lead to the biased DA output. This study has implications for firms that design, develop and use DAs.

Originality/value

This study considers a yet unexamined face validity issue – observable bias in DA output. This study examines deterministic DAs designed to assist the decision-maker through their ability to combine multiple cues in a systematic and consistent manner. This study has implications for firms that design, develop and use DAs. Firms need to consider the effects of using a DA under circumstances different from those under which the aid is developed, thereby, potentially leading to biased DA output. Each additional variable added to the DA will be associated with an incremental cost in a DA’s development, use and modification. The results of this study provide insights contributing to the information available for cost–benefit analyses conducted when developing a DA or when considering the modification of existing aid. Failure to change a DA because of face validity issues alone may result in a decline in user performance. Thus, the cost of modifying a DA must be weighed against the benefits resulting from improved performance. This study contributes insights into how users’ responses to DA bias could affect the assessments of the benefits of including an omitted variable in a DA.

Details

Journal of Accounting & Organizational Change, vol. 16 no. 2
Type: Research Article
ISSN: 1832-5912

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Article
Publication date: 11 March 2019

Maia Farkas and Walied Keshk

The use of social networking websites by companies to disclose corporate news and by investors to collect information for investment purposes is increasing rapidly…

Abstract

Purpose

The use of social networking websites by companies to disclose corporate news and by investors to collect information for investment purposes is increasing rapidly. However, the role of investors’ affective reactions to corporate disclosures on social networking websites is under-researched. This paper aims to examine how the disclosure platform (disclosing news on a company’s Facebook Web page or the corporate investor relations Web page) and news valence (positive or negative) jointly influence investors’ affective reactions to corporate news and stock price change judgments.

Design/methodology/approach

The authors conduct an experimental study using 364 participants from Amazon’s Mechanical Turk website as a proxy for reasonably informed investors.

Findings

Results show that the disclosure platform influences investors’ affective reactions and stock price change judgments when the corporate news is negative, but not when the corporate news is positive. In addition, investors’ affective reactions mediate the influence of the disclosure platform on investors’ stock price change judgments when the corporate news is negative rather than positive.

Originality/value

This paper extends the theory on affective reactions to a social networking context by showing that differences in disclosure platforms and news valence influence investors’ affective reactions to corporate news. In addition, the study’s theory and findings have significant implications for researchers, company managers and public relations specialists, capital market participants, regulators and investor education organizations and users of social networking websites.

Details

Journal of Financial Reporting and Accounting, vol. 17 no. 1
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 14 May 2019

Maia Farkas, Rina Hirsch and Julia Kokina

The purpose of this paper is to examine potential determinants of management’s agreement with internal auditor recommendations of an interim assurance engagement.

Abstract

Purpose

The purpose of this paper is to examine potential determinants of management’s agreement with internal auditor recommendations of an interim assurance engagement.

Design/methodology/approach

The experiment involved a 2 × 2 × 2 design with internal auditor gender, mode of communication and root cause variables randomly assigned to 228 experienced managers.

Findings

When the internal auditor includes a root cause for an identified deficiency in an internal audit report, management perceptions of the quality of that report improve. The gender of the internal auditor who communicates the audit finding with management does not significantly impact management’s perceptions. Additionally, communicating the internal audit report via e-mail instead of videoconference results in improved managerial perceptions of the quality of the internal auditor. While improvements in perceptions of internal auditor quality lead to greater agreement with internal auditor recommendations, improvements in perceptions of report quality lead to greater implementation of internal-auditor-recommended remediation strategies.

Research limitations/implications

The operationalization of the manipulated variables of interest (communication mode, gender and root cause) may limit the generalizability of the study’s results.

Practical implications

The paper includes managerial implications for internal auditors’ choice of communication mode and inclusion of a root cause in interim internal audit reports.

Originality/value

This study provides evidence on the factors that could improve management’s perceptions of internal auditors’ work. The findings can help organizations, such as the Institute of Internal Auditors, to better understand how to address the needs of those who communicate with internal auditors.

Details

Managerial Auditing Journal, vol. 34 no. 4
Type: Research Article
ISSN: 0268-6902

Keywords

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Article
Publication date: 12 August 2020

Robert Marley and Lee Kersting

In this empirical study, the primary aim is to examine whether the type of feedback provided, relative performance information (RPI) vs outcome, affects individual's task…

Abstract

Purpose

In this empirical study, the primary aim is to examine whether the type of feedback provided, relative performance information (RPI) vs outcome, affects individual's task satisfaction in a context without financial incentives. A secondary objective is to explore whether differences in individuals' task satisfaction were associated with their performance level.

Design/methodology/approach

Participants completed a mundane, effort-based task in a 1 × 2 between-subjects experimental design where the type of feedback was manipulated at two levels (RPI vs outcome).

Findings

The results revealed a positive link between providing RPI feedback to individuals and their self-reported task satisfaction compared to individuals provided with outcome feedback. We find that individuals' task satisfaction is not associated with their task performance, supporting our prediction that the level of knowledge of results affects individuals' task satisfaction.

Research limitations/implications

The experimental task used in this study was mundane and effort intensive. Consequently, future research may be needed to examine whether the results generalize to more creative, less effort-intensive tasks. This study also utilized student participants as a proxy for employees, which is appropriate for the task, but may not generalize to organizational settings requiring specialized knowledge or task experience.

Practical implications

The findings suggest that organizations may find providing employees with RPI to be a relatively low-cost, non-financial incentive for improving employee task satisfaction, a construct documented to reduce employee turnover and absenteeism.

Originality/value

While prior research focuses on the effects of providing RPI on individuals' performance and effort, this study extends prior research to individuals' task satisfaction, an affective construct, illustrating that RPI is multi-dimensional. Our results also have implications for theory. We extend the feedback proposition of the widely applied Job Characteristics Model (JCM) by illustrating the type of feedback provided to individuals has task satisfaction effects beyond those associated with the mere presence of feedback.

Details

International Journal of Productivity and Performance Management, vol. 70 no. 8
Type: Research Article
ISSN: 1741-0401

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Article
Publication date: 16 July 2021

Navid Nezafati, Shokouh Razaghi, Hossein Moradi, Sajjad Shokouhyar and Sepideh Jafari

This paper aims to identify the impact of demographical and organizational variables such as age, gender, experiences use of knowledge management system (KMS), education…

Abstract

Purpose

This paper aims to identify the impact of demographical and organizational variables such as age, gender, experiences use of knowledge management system (KMS), education and job level on knowledge sharing (KS) performance of knowledge workers in knowledge activities of a KMS. Specifically, it seeks to explore that is there any relationship between the KS behavior patterns of high KS performance knowledge workers with their performance. Furthermore, this study using its conceptual attitude model aims to show that whether knowledge workers’ behavior patterns in sharing information and knowledge throughout a KMS have any specific effect or not.

Design/methodology/approach

This paper proposed a framework to mine knowledge workers’ raw data using data mining techniques such as clustering and association rules mining. Also, this research uses a case-based approach to a knowledge-intensive company in Iran that works in the field of information technology with 730 numbers of workers.

Findings

Findings suggest that demographical and organizational variables such as age, education and experience use of KMS have positive effects on knowledge worker’s KS behavior in KMSs. In fact, people who have lower age, higher education degrees and more experience use of KMS, have more participation in KS in KMS. Also, results depict that the experienced use of KMS has the most impact on the intention of KS in this KMS. Findings emphasize on the importance of the influence of the behavioral, organizational environments and psychological factors such as reward system, top management support, openness and trust, on KS performance of knowledge workers in the KMS. In fact, according to data, the KMS reward system caused to increasing participation of the users in KS, also in each knowledge activity that top managers participate in, the scores were higher.

Practical implications

This research helps top managers in designing policies and strategies to improve the participation of knowledge workers in KS and helps human resource managers to improve their membership policies. Also, assist Information Technology (IT) managers to enhance KMSs’ design to leverage with organization strategies in the field of improving KS and encourage people to participate in KMS.

Originality/value

This research has two key values. First, this paper applies a data mining framework to mining and analyzing data and this paper uses actual data of a KMS in a specialist company in Iran, with about 27,740 real data points. Second, this paper investigates the impact of demographical and organizational attributes on KS behavior, which little is empirically known about the impact of demographical variables on KS intention.

Details

VINE Journal of Information and Knowledge Management Systems, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2059-5891

Keywords

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Article
Publication date: 9 October 2019

Andreia Fernandes, Patrícia C.T. Gonçalves, Pedro Campos and Catarina Delgado

Based on the data obtained from a questionnaire of 595 people, the authors explore the relative importance of consumers, checking whether socioeconomic variables influence…

Abstract

Purpose

Based on the data obtained from a questionnaire of 595 people, the authors explore the relative importance of consumers, checking whether socioeconomic variables influence their centrality, detecting the communities within the network to which they belong, identifying consumption patterns and checking whether there is any relationship between co-marketing and consumer choices.

Design/methodology/approach

A multilayer network is created from data collected through a consumer survey to identify customers’ choices in seven different markets. The authors focus the analysis on a smaller kinship and cohabitation network and apply the LART network community detection algorithm. To verify the association between consumers’ centrality and variables related to their respective socioeconomic profile, the authors develop an econometric model to measure their impact on consumer’s degree centrality.

Findings

Based on 595 responses analysing individual consumers, the authors find out which consumers invest and which variables influence consumers’ centrality. Using a smaller sample of 70 consumers for whom they know kinship and cohabitation relationships, the authors detect communities with the same consumption patterns and verify that this may be an adequate way to establish co-marketing strategies.

Originality/value

Network analysis has become a widely used technique in the extraction of knowledge on consumers. This paper’s main (and novel) contribution lies in providing a greater understanding on how multilayer networks represent hidden databases with potential knowledge to be considered in business decisions. Centrality and community detection are crucial measures in network science which enable customers with the highest potential value to be identified in a network. Customers are increasingly seen as multidimensional, considering their preferences in various markets.

Details

Journal of Business & Industrial Marketing, vol. 34 no. 8
Type: Research Article
ISSN: 0885-8624

Keywords

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