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Communicated Values as Informal Controls: Promoting Quality While Undermining Productivity?

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  • Steven J. Kachelmeier
  • Todd A. Thornock
  • Michael G. Williamson

Abstract

We find that the effectiveness of piece†rate compensation relative to fixed pay in a laboratory letter†search task hinges on the presence or absence of a nonbinding statement to participants that the experimenter values correct responses. In the absence of the value statement, participants with piece†rate rewards for correct responses generate more correct and incorrect responses than do their counterparts with fixed pay, correcting errors as they go along to maximize compensation. Essentially, piece†rate compensation acts as an output control, incentivizing participants to maximize correct responses through a “produce†and†improve†strategy. The value statement suppresses this strategy because participants appear to perceive it as an input constraint, prompting greater initial care at the expense of lower overall productivity. As a result, the value statement eliminates the gains in correct responses that piece†rate incentivized participants otherwise realize. Thus, in settings in which individuals can gain efficiency by working expeditiously and improving quality when necessary, our results suggest the possibility that organizations could be better off just letting incentive schemes operate, rather than emphasizing quality in ways that could overly constrain productivity.À l'aide d'une tâche expérimentale de recherche de lettres, les auteurs constatent que l'efficacité de la rémunération à la pièce par rapport à la rémunération fixe dépend de la présence ou de l'absence d'un énoncé indicatif informant les participants que l'expérimentateur attribue une valeur aux réponses correctes. Sans cet énoncé relatif à la valeur, les participants rétribués à la pièce pour leurs réponses correctes produisent davantage de réponses correctes et incorrectes que ce n'est le cas des participants qui reçoivent une rétribution fixe, et ils corrigent à rebours leurs erreurs au fur et à mesure que l'exercice se déroule, afin de maximiser leur rétribution. La rémunération à la pièce permet essentiellement de contrôler l’extrant, incitant les participants à produire des résultats exacts grâce à une stratégie « de production et de correction ». L’énoncé relatif à la valeur supprime cette stratégie, car il semble être perçu comme une contrainte relative à l’intrant sous l'effet de laquelle l'exactitude devient importante comme condition du processus de production, ce qui accroît la qualité des réponses aux dépens de la productivité. En conséquence, l’énoncé relatif à la valeur élimine les gains d'exactitude des réponses que réalisent par ailleurs les participants encouragés par une rétribution à la pièce. Donc, dans les situations où les travailleurs peuvent s'ajuster et corriger leurs erreurs pour maximiser l'exactitude de leurs réponses, les résultats obtenus par les auteurs semblent indiquer que les organisations sont susceptibles de mieux s'en tirer en laissant simplement œuvrer les régimes incitatifs plutôt que de mettre l'accent sur l'exactitude au moyen de méthodes qui risqueraient de réduire la productivité.

Suggested Citation

  • Steven J. Kachelmeier & Todd A. Thornock & Michael G. Williamson, 2016. "Communicated Values as Informal Controls: Promoting Quality While Undermining Productivity?," Contemporary Accounting Research, John Wiley & Sons, vol. 33(4), pages 1411-1434, December.
  • Handle: RePEc:wly:coacre:v:33:y:2016:i:4:p:1411-1434
    DOI: 10.1111/1911-3846.12147
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    Cited by:

    1. Nicole Nikiforow & Sebastian Wagener, 2021. "The contextual effect of completion on the effectiveness of performance feedback," Journal of Business Economics, Springer, vol. 91(1), pages 61-90, February.
    2. Bernhard E. Reichert & Matthias Sohn, 2022. "How Corporate Charitable Giving Reduces the Costs of Formal Controls," Journal of Business Ethics, Springer, vol. 176(4), pages 689-704, April.
    3. Andrejkow, Joanna & Berger, Leslie & Guo, Lan, 2022. "Conscious and nonconscious goal pursuit in multidimensional tasks," Accounting, Organizations and Society, Elsevier, vol. 103(C).
    4. Malmi, Teemu & Bedford, David S. & Brühl, Rolf & Dergård, Johan & Hoozée, Sophie & Janschek, Otto & Willert, Jeanette & Ax, Christian & Bednarek, Piotr & Gosselin, Maurice & Hanzlick, Michael & Israel, 2020. "Culture and management control interdependence: An analysis of control choices that complement the delegation of authority in Western cultural regions," Accounting, Organizations and Society, Elsevier, vol. 86(C).
    5. Kazeem O. Akinyele & Vicky Arnold & Steve G. Sutton, 2022. "Motivating unrewarded task performance: The dual effects of incentives and an organisational value statement in a discretionary task setting," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2439-2466, June.
    6. Douthit, Jeremy & Majerczyk, Michael, 2019. "Subordinate perceptions of the superior and agency costs: Theory and evidence," Accounting, Organizations and Society, Elsevier, vol. 78(C).
    7. Christoph Feichter & Isabella Grabner, 2020. "Empirische Forschung zu Management Control – Ein Überblick und neue Trends [Empirical Management Control Reserach—An Overview and Future Directions]," Schmalenbach Journal of Business Research, Springer, vol. 72(2), pages 149-181, June.

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