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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.

Organizations regularly use budgets as benchmarks for performance, and budgets represent a key control feature for almost every organization (Brown and Solomon (1993)). Research has demonstrated that outcome effects are pervasive in performance evaluation processes, and that performance evaluators do not interpret situational information consistently. An experiment is conducted to examine the effects of situational information on managers’ performance and ability attributions under conditions of favorable and unfavorable financial outcomes. The findings indicate that when financial outcomes are unfavorable, outcome effects dominate the performance evaluation process, and situational information has little effect on performance evaluations. The results of cognitive load manipulations indicate that situational information is not ignored, but rather discounted when financial outcomes are favorable.

One aspect of attracting new employees that has historically been ignored by recruitment researchers is salary negotiations. In this study, we used a hypothetical scenario design to depict salary negotiation experiences in which we varied the levels of salary offer, the behavior of a company and its representative, and the deadlines for receiving a signing bonus. MBA students served as study participants who read the scenarios and responded to questions about perceived organizational attractiveness and job acceptance decisions—two important recruitment outcomes. As hypothesized, our results indicated that salaries, a company's responsiveness to candidate questions, and a company representative's expression of derogatory comments all impact recruitment outcomes. However, exploding signing bonuses had no significant effects, calling into question the negative connotation practitioners have of exploding compensation schemes. Our justice framework revealed that many of the effects that we found for our manipulations on participants' judgments regarding our recruitment outcomes were mediated by perceptions of organizational justice. Finally, we found some evidence of the frustration effect, as procedures that were considered fair worsened rather than mitigated the negative effects of unfair outcomes on job acceptance decisions.

This research aims to examine how source of funds (paying with company’s funds versus personal funds) affects buyer’s judgments of price fairness and via these judgments, buyer’s response to prices.

A scenario-based experiment is used (N = 200). To test the hypotheses, the authors run moderated mediation regression analyses with the help of the PROCESS macro.

Drawing on fairness heuristics theory, the authors hypothesize and find that relative to when paying with personal funds, when paying with company’s funds, the perceived price difference plays a less significant role, whereas the perceived social acceptability of the pricing practice underlying the price difference plays a more important role in shaping price fairness judgments and, via these judgments, buyer’s response to prices.

The findings generate advice for companies that serve both the business and personal segments (e.g. airlines and hotels). Buyers in the personal segment typically pay with their own money. To persuade these buyers that a price is fair, it is crucial to show that the price represents a good deal for them. Buyers in the business segment often pay with company’s fund. Companies have more flexibility in charging different prices, but they should make sure that the reasons for the price difference are socially acceptable.

This research shows how the relative role of price difference versus social acceptability in price fairness judgments varies as a function of source of funds and how an inconsistency between price difference and its economic impact affects price fairness judgments.

The purpose of this paper is to understand the roles that social capital and real-world learning may play in enhancing the effects of university education for sustainable development (ESD) on social sustainability.

A conceptual framework that identifies the plausible effects of university ESD on social sustainability along three outcome dimensions (think-act-leverage), broadening desirable program learning outcomes and proposing enabling roles for social capital and real-world learning, is substantiated and validated through qualitative insights from a focus group. The framework serves to structure a survey to alumni of a postgraduate program in sustainability (2011–2018). Hierarchical clustering analysis is used to identify differences in perceived, sustainability-related effects of the program on direct beneficiaries and their relationship with stakeholders in their communities.

Implementation of real-world learning in partnership with organizations in the community that actively involves alumni not only extends desirable effects beyond individual program learning outcomes and outside the academia but may also renew them over time.

University administrators should foster the creation of new social capital of students and alumni and their commitment with service learning and other credit-bearing opportunities as actionable enablers to enhance the social sustainability effects of university ESD.

The paper contributes to a dual theoretical and empirical void related to the effects of university ESD on the social dimension of sustainability through the proposal of a conceptual framework and quantitative assessment of the dynamic effects of university ESD at the local level.

This paper aims to examine the direct and indirect effects of substitutes for leadership on performance outcomes.

A self‐report questionnaire was distributed to a sample of 177 Australian local council employees. The responses were analysed using ICLUST analysis and hierarchical multiple regression analysis.

The results indicated significant positive effects of some substitutes for leadership on performance outcomes. Furthermore, some substitutes for leadership moderated the effects of transactional leadership behaviours on performance outcomes, whereas another sub‐component of substitutes for leadership moderated the effects of social processes of leadership on performance outcomes. In addition, some substitutes for leadership partially mediated the relationship between transformational leadership and performance outcomes.

The cross‐sectional design of the study reduces the capacity to draw definitive causal inferences.

The current study supports the view that council leaders could have influenced the employees' attitudes, perceptions, and performance by indirectly shaping the environment in which the subordinates worked (i.e. shaping task and organisational characteristics). The study implies the need for leaders in the local councils to understand those substitutes for leadership that mediate the influence of transformational leadership (such as group and work design capacities) and how they can be managed to enhance employee performance outcomes.

This is one of the first Australian studies to comprehensively examine the influence of substitutes for leadership on performance outcomes.

The purpose of this paper is to examine how three key dimensions of a firm’s offshoring portfolio – location diversity, functional diversity and governance mode – affect the financial and innovation outcomes of offshoring.

The authors investigate the relationships between the diversity of a firm’s offshoring portfolio and its offshoring outcomes using a sample of US, European and Asia Pacific firms engaging in offshoring activities.

The authors found that: location diversity shows a significant “flipped S-shape” relationship with innovation outcomes, but has a negative impact on financial outcomes, functional diversity has a significant and positive effect on innovation outcome and the use of an outsourcing governance mode significantly moderates these relationships, such that the degree of offshore outsourcing weakens some of these effects.

The authors conclude that firms which strategically coordinate all three dimensions of their offshoring portfolio are more likely to achieve better innovation or financial outcomes from their use of offshoring in global supply chain and sourcing.

The purpose of this paper is to answer the question: What happens to the outcomes of pay dispersion when the employees own stock in their own company?

The data set consisted of over 20,000 employee surveys. Pay dispersion was measured with the Gini coefficient. The outcome variables were attitudes and behaviors with numerous controls. The moderation effect of employee ownership was investigated at the individual and group level using multilevel regression analysis.

Most hypothesized outcomes did not yield statistically significant results. The results that were statistically significant had two patterns: first, higher pay dispersion was consistently associated with improved attitudes and behaviors; and second, employee ownership moderated the outcomes of pay dispersion for certain outcomes and job types (e.g. perceptions of company fairness among administrative support personnel, or absenteeism and production personnel). There was no evidence to support a link between pay dispersion and attitudes across job types (vertical), only within job types (horizontal).

All the data were self-reported in surveys. Attitudes were measured with single items rather than validated scales. The data were cross-sectional, so no causality can be inferred.

While both higher pay dispersion and employee ownership can motivate employees, the interaction between them can be negative, especially in a cooperative environment. Consideration should be given to this when designing compensation packages.

There was a surprisingly strong link between higher pay differentials and improved attitudes, suggesting that the opportunity for higher pay is more influential than any feelings of inequity.

The effect of employee ownership on the outcomes of pay dispersion has never been investigated. This should be valuable given how widely higher pay is used to attract, retain and motivate employees (leading to pay dispersion) as well as how increasingly popular employee ownership is becoming.

The purpose of this article is to provide further insight into the relationship between supervisor support and transfer of training, by taking into account the effects of other transfer‐influencing factors in a systemic approach of the transfer process.

A review of studies on factors affecting transfer of training was conducted, with a specific focus on the effects of supervisor support, resulting in the development of a research model of the transfer process. All components of the model were measured by means of questionnaires for former trainees and their supervisors, and stepwise regression analyses were carried out to examine the relationships in the model.

Results indicate indirect relationships between supervisor support and transfer of training, by means of both trainees' motivation to transfer and the transfer climate. The indirect effect of supervisor support on transfer of training is only slight, however. Learning results are shown to be the strongest predictor of transfer of training.

Owing to the small sample size structural equation modelling techniques could not be used, thus limiting the possibility to test the model as a single entity. The use of perceptional measures implies the risk of response tendencies from trainees and supervisors. Further research using different measures and different timing of measurement during the training and transfer process is recommended.

Results of this study indicate that supervisor support that is intended to enhance transfer of training can best be directed at improvement of the transfer climate at the workplace.

The paper provides both researchers and practitioners with a further insight into the complex effects of supervisor support on transfer of training, indicating the importance of taking into account the effects of other transfer‐influencing factors.

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.