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1 – 10 of over 61000
Article
Publication date: 1 January 2006

Robert L. Cardy and T.T. Selvarajan

The objective of this empirical study is to apply the methodology commonly used to performance appraisal and examine if outcomes achieved by ratees bias rater's judgment…

5696

Abstract

Purpose

The objective of this empirical study is to apply the methodology commonly used to performance appraisal and examine if outcomes achieved by ratees bias rater's judgment of ratee ethical behavior.

Design/methodology/approach

Two studies were conducted: in study 1 the participants were undergraduate business students and in study 2, the participants were MBA students but who were also full time employees. In both these studies, participants read the vignettes and rated the ratee performance using behavior observation scale.

Findings

Both the studies found support for the main hypothesis that outcomes achieved by the ratees influenced judgment of ethical behavior. The hypothesis that ethical beliefs of raters will moderate the biasing influence of outcomes on ethical judgment bias was not supported.

Research limitations/implications

If outcomes achieved by employees influence judgment of ethical behavior, future research has to examine how the biasing influence of outcomes on ethical judgments can be mitigated or eliminated.

Practical implications

If managers are influence by outcomes achieved by their employees in judging the ethical behavior, it can lead to “success breeds acceptance” culture. If organizations place undue emphasis on outcomes at the cost of ethical standards, unethical behavior of individuals could be condoned or justified which would lead to worsening of ethical climate in these organizations.

Originality/value

This study demonstrated that outcomes achieved by employees biases judgment of their ethical behavior and this finding has important implications for designing effective appraisal systems for assessing ethical behavior of employees.

Details

Journal of Managerial Psychology, vol. 21 no. 1
Type: Research Article
ISSN: 0268-3946

Keywords

Article
Publication date: 17 July 2013

Lasse Mertins, Debra Salbador and James H. Long

This paper synthesizes the extant research on the outcome effect in the accounting domain, focusing primarily on the context of performance evaluation. It reviews the…

3328

Abstract

This paper synthesizes the extant research on the outcome effect in the accounting domain, focusing primarily on the context of performance evaluation. It reviews the current state of our knowledge about this phenomenon, including its underlying cognitive and motivational causes, the contexts in which the outcome effect is observed, the factors that influence its various manifestations, and ways in which undesirable outcome effects can be mitigated. It also considers various perspectives about the extent to which outcome effects represent undesirable judgmental bias, and whether this distinction is necessary to motivate research on this topic. The paper is intended to motivate and facilitate future research into the effects of outcome knowledge on judgment in the accounting context. Therefore, we also identify important unanswered questions and discuss opportunities for future research throughout the paper. These include additional consideration of instances in which the outcome effect is reflective of bias, how this bias can be effectively mitigated, ways in which outcome information influences judgment (regardless of whether this influence is considered normative), and how the underlying causes of the outcome effect operate singly and jointly to bring about the outcome effect. We also consider ways that future research can contribute to practice by determining how to encourage evaluators to retain and incorporate the relevant information conveyed by outcomes, while avoiding the inappropriate use of outcome information, and by enhancing external validity to increase the generalizability of experimental results to scenarios frequently encountered in practice.

Details

Journal of Accounting Literature, vol. 31 no. 1
Type: Research Article
ISSN: 0737-4607

Keywords

Article
Publication date: 5 June 2009

Rajan Selvarajan and Peggy A. Cloninger

The purpose of this paper is to examine how ethical assessments of employees are influenced by job performance outcomes, that is, by an employee's success or failure as…

4114

Abstract

Purpose

The purpose of this paper is to examine how ethical assessments of employees are influenced by job performance outcomes, that is, by an employee's success or failure as measured by a successful or unsuccessful job appraisal.

Design/methodology/approach

A sample of 180 employees rated the performance of a fictitious salesperson described in one of four written vignettes as successful/ethical, successful/unethical, unsuccessful/ethical or unsuccessful/unethical.

Findings

Job performance outcomes bias the ethical assessments of raters, even raters with stronger ethical beliefs. Successful employees were judged to have exhibited more ethical behaviors than unsuccessful employees.

Research limitations/implications

Job performance outcomes are a systematic source of bias that should be examined to determine the locus of effect as either rater perception and/or recall of ethical behavior that is biased by the job outcomes achieved by ratees. Studies should also examine other rater characteristics such as cognitive moral development; whether ethical intensity of the incidents in the vignettes influences assessments; whether training or other sources of appraisal (e.g. customers or peers) moderates bias; and field settings.

Practical implications

Managers who reward unethical performance with positive job appraisals will influence other employees to be more accepting of unethical behavior and may undermine organizational processes such as background checks. Organizations may try to counter these effects by other sources of appraisal (e.g. customers or peers), training, or supplementary methods.

Originality/value

The research provides important new empirical evidence regarding incorporating ethical behavior into performance appraisals, and has implications for managers seeking to improve employees' ethical behaviors, and for researchers examining performance appraisals, cognition, ethics, and organizational processes.

Details

Personnel Review, vol. 38 no. 4
Type: Research Article
ISSN: 0048-3486

Keywords

Article
Publication date: 1 January 2009

Steve Buchheit, William R. Pasewark and Jerry R. Strawser

The purpose of this paper is to investigate whether audit professionals exhibit greater performance evaluation bias compared to non‐accounting professionals.

1584

Abstract

Purpose

The purpose of this paper is to investigate whether audit professionals exhibit greater performance evaluation bias compared to non‐accounting professionals.

Design/methodology/approach

Both audit and non‐accounting professional subjects read a case study and evaluated the performance of a hypothetical subordinate. Two factors were manipulated the subordinate's work performance history and the subordinate's current performance relative to a budget.

Findings

It was found that reputation bias and hindsight bias are prevalent in both professional groups. The groups exhibit no difference with respect to reputation bias; however, it was found that public accountants exhibit significantly greater hindsight bias relative to non‐accounting professionals.

Practical implications

The paper provides evidence that accountants are relatively harsh critics of subordinate performance. Importantly, the paper investigates accountant vs non‐accountant comparisons where subordinates' ex ante decisions are consistent with superiors' ex ante guidance (i.e. ex post performance being either favorable vs unfavorable is purely outcome‐effect driven). If the findings are robust, this study provides a fundamental reason why employee retention in public accounting is relatively low.

Originality/value

This paper is the first to make direct comparisons of performance evaluation bias effects between auditors and similarly experienced working professions.

Details

Managerial Auditing Journal, vol. 24 no. 1
Type: Research Article
ISSN: 0268-6902

Keywords

Book part
Publication date: 20 October 2015

Darius J. Fatemi, John Hasseldine and Peggy A. Hite

This study documents that an outcome-favorable bias is greater when the quantity of information describing a balanced tax-decision context is substantially increased…

Abstract

This study documents that an outcome-favorable bias is greater when the quantity of information describing a balanced tax-decision context is substantially increased. Second, the study demonstrates that an outcome-favorable bias can be offset by the use of principles-based ethical standards. Specifically, we examine the effect of AICPA Code of Conduct Section 54 for integrity and Rule 102-6 for advocacy. Students volunteered to participate in this study examining the manner in which accounting novices initially process principles-based standards. Prior studies using student subjects in an audit setting have found that principles-based standards were effective only when students had high levels of moral reasoning (Herron & Gilbertson, 2004), and rules-based technical standards had no impact on student subjects when making financial adjustments (Pflugrath, Martinov-Bennie, & Chen, 2007). If professional standards increasingly rely on principles-based standards, then understanding the impact of such standards on future entrants into the profession would provide guidance in the creation and implementation of future standards, as well as assist educators in the development of accounting curricula. We extend the pattern of past research to a tax setting and show that tax-saving recommendations are a function of the presence of a professional standard and the level of contextual detail.

Details

Advances in Taxation
Type: Book
ISBN: 978-1-78560-277-1

Keywords

Article
Publication date: 1 June 2015

Lingjing Zhan, Piyush Sharma and Ricky Y. K. Chan

The purpose of this paper is to investigate how counterfeit users estimate the probability of being detected and how this probability affects their counterfeit consumption…

1081

Abstract

Purpose

The purpose of this paper is to investigate how counterfeit users estimate the probability of being detected and how this probability affects their counterfeit consumption behaviour. Specifically, it addresses three questions: do perceived social consequences influence counterfeit users’ probability estimate of being detected? What is the psychological mechanism underlying the estimation of this probability? And how does this probability estimate affect counterfeit purchase and usage intentions?

Design/methodology/approach

The authors used three scenario-based experimental studies with university students in Hong Kong, a place where counterfeit products are widely available. First study used a factitious brand of jeans as the stimulus and the other two studies used a Ralph Lauren polo shirt. In each study, the authors measured participants’ responses towards counterfeit purchase and the probability of being detected after they read the relevant brand information and had a close-up view of the attributes in the genuine and counterfeit versions.

Findings

The authors found that counterfeit users are susceptible to a pessimism bias such that they estimate a higher probability of being detected when they judge the outcome of being detected as more severe and this bias is driven by the spotlight effect in that counterfeit users judging the outcome as more severe tend to perceive that others pay more attention to their counterfeit usage. Moreover, this pessimism bias is mitigated when the target user is another person instead of oneself, thus suggesting the egocentric nature of the bias.

Research limitations/implications

The authors used undergraduate students and scenario-based experimental approach in all the studies that may limit the generalisability of the findings.

Practical implications

The results suggest that brand managers should emphasise the importance of negative social consequences and highlight the role of outcome severity and egocentric bias in their advertising and communication programmes in order to curb counterfeit consumption.

Originality/value

The research contributes to the growing literature on counterfeit consumption by studying the process underlying estimation of the probability of being detected by others, an important but often neglected factor that influences counterfeit purchase decision. The authors also highlight the role of outcome severity and egocentric bias in this process.

Details

Marketing Intelligence & Planning, vol. 33 no. 4
Type: Research Article
ISSN: 0263-4503

Keywords

Article
Publication date: 29 March 2011

Yu‐Chieh Chao

The purpose of this conceptual paper is to examine how a focal firm's decision‐making biases at each stage of the alliance life cycle can cause alliance failures such as…

2912

Abstract

Purpose

The purpose of this conceptual paper is to examine how a focal firm's decision‐making biases at each stage of the alliance life cycle can cause alliance failures such as premature termination and less‐than‐expected productivity.

Design/methodology/approach

A dyadic decision‐making approach is used to examine the consequences of decision‐making biases in the evolution of alliances. Concrete cases are presented to substantiate the arguments.

Findings

Paying insufficient attention to an alliance partner's behavior causes different judgmental mistakes or decision‐making biases at different stages of the alliance life cycle. These biases can lead to alliance failure.

Research limitations/implications

Dyadic decision making provides a framework to explain persistent but poorly understood dysfunctional behavior in alliances. Although previous authors have acknowledged that safeguards and trust are effective ways to reduce dysfunctional behavior, their mechanisms are still unclear. The paper's arguments suggest that decision‐making biases may serve as crucial mediators of the relationship between governance designs (safeguards or trust) and alliance outcomes. Future work can provide evidence to verify this postulate.

Practical implications

Decision‐making biases emerge in the evolution of alliances and influence alliance performance. Understanding the influence of biases helps to prevent their negative effects and reduces the probability of alliance failure.

Originality/value

Dyadic decision making provides a behavioral framework that complements traditional economic and organizational perspectives in explaining interorganizational decision‐making outcomes in the real world. Three kinds of biases – overconfidence, single outcome calculation, and adjustment and anchoring – are discussed in the paper. The paper addresses how these biases can emerge in the alliance life cycle and lead to various types of dysfunctional behavior, which, in turn, may cause alliance failures such as premature termination and less‐than‐expected productivity.

Details

Management Decision, vol. 49 no. 3
Type: Research Article
ISSN: 0025-1747

Keywords

Abstract

Details

Investment Traps Exposed
Type: Book
ISBN: 978-1-78714-253-4

Article
Publication date: 1 May 2001

Steve Buchheit and Bob Richardson

Lists research evidence that organizations are often unaware of underutilized capacity resources and examines the implications of explicit unused capacity reporting which…

Abstract

Lists research evidence that organizations are often unaware of underutilized capacity resources and examines the implications of explicit unused capacity reporting which identifies the cost of unused capacity, pointing out that although this information is useful, it may increase evaluator outcome effects. Describes an experiment to test this and shows that where unused capacity is reported biased performance evaluation results; and individual decision makers may inappropriately reduce capacity or increase production to avoid negative evaluations. Considers how management accountants can mitigate this effect, recognizes the limitations of the study and calls for further research.

Details

Managerial Finance, vol. 27 no. 5
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 1 December 2000

Douglas Amyx, John C. Mowen and Robert Hamm

An experiment was conducted to examine the relationship between patient satisfaction and patients’ freedom to choose a physician and the outcome of a health service…

2189

Abstract

An experiment was conducted to examine the relationship between patient satisfaction and patients’ freedom to choose a physician and the outcome of a health service encounter. Each construct with corresponding measurements is discussed and their relationship with satisfaction is reviewed. Hypotheses were developed and tested for each relationship using pencil and paper scenarios of a patient’s service encounter at a health clinic. The study yielded four major findings. First, patients who experienced a good health outcome were significantly more satisfied than patients who received a bad health outcome. Second, patient satisfaction ratings differed significantly only in the bad outcome condition, suggesting an outcome bias. Third, patients who were given the freedom to select a physician but did not receive their chosen physician were least satisfied. Fourth, there was no difference in satisfaction between patients who had a choice of physician and those who did not.

Details

Journal of Services Marketing, vol. 14 no. 7
Type: Research Article
ISSN: 0887-6045

Keywords

1 – 10 of over 61000