Wording and Saliency Matter: The Impact of Incentive System and Organizational Value Statement on Employees’ Performance

34 Pages Posted: 16 Aug 2018

See all articles by Kazeem Akinyele

Kazeem Akinyele

University of Wisconsin-Oshkosh

Vicky Arnold

Norwegian School of Economics (NHH); University of Central Florida

Steve G. Sutton

University of Central Florida; NHH Norwegian School of Economics

Date Written: August 16, 2018

Abstract

A recent focus within the management control literature has been the recognition of the need to consider how packages of controls interact to influence employee behavior. This study extends recent research on the interaction of formal and informal controls. We use a sequence of two experiments to expand upon research by Kachelmeier, Thornock, and Williamson (2016) who find that a value statement focused on quality can moderate productivity associated with incentive schemes. Experiment 1 replicates Kachelmeier et al., but substitutes a general organizational value statement in place of a quality specific statement and finds that the same basic interactive effect occurs—a value statement increases (decreases) productivity associated with fixed pay (piece-rate) incentives. Experiment 2 further extends the work on value statements by considering the espoused management best practices of broadly reinforcing the value statement to increase the statement’s saliency with employees. The results of the second experiment confirm that enhancing the saliency of the organizational value statement through active delivery, as opposed to the passive delivery used in previous studies, increases the moderation effect. These results contribute to the growing stream of research that is beginning to explore the interactive effects of packages of controls.

Keywords: incentive systems, value statements, employees’ performance, informal controls, formal controls, management controls

Suggested Citation

Akinyele, Kazeem and Arnold, Vicky and Sutton, Steve G. and Sutton, Steve G., Wording and Saliency Matter: The Impact of Incentive System and Organizational Value Statement on Employees’ Performance (August 16, 2018). Available at SSRN: https://ssrn.com/abstract=3232935 or http://dx.doi.org/10.2139/ssrn.3232935

Kazeem Akinyele (Contact Author)

University of Wisconsin-Oshkosh ( email )

800 Algoma Blvd
Oshkosh, WI 54901
United States
9204240497 (Phone)

Vicky Arnold

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway

University of Central Florida ( email )

University of Central Florida
P.O. Box 161400
Orlando, FL 32816-1400
United States
3217455000 (Phone)
32127 (Fax)

Steve G. Sutton

University of Central Florida ( email )

4000 Central Florida Blvd
Orlando, FL 32816
United States

NHH Norwegian School of Economics ( email )

Helleveien 30
Bergen, NO-5045
Norway

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