The effect of control justification on employees’ in-role and extra-role behaviors

Prior studies on management control find that formal controls (e.g., monitoring) can engender employees’ negative responses toward the organization because they signal management’s distrust. The present study examines whether management’s justification for adopting a stricter control (deterrence justification versus just deserts justification) can mitigate employees’ perceived distrust by organization and the adverse consequences of the control. Using an experiment, we find that employees are more likely to feel distrusted when an organization strengthens its control with a deterrence justification than with a just-deserts justification. We subsequently examine and find that employees decrease misreporting although they feel distrusted. However, our serial mediation model shows that employees’ feelings of distrust elicited by deterrence justification, spill over to negatively influence extra-role behavior as a result of low reciprocal trust. Results of our study contribute to the literature on the effect of controls and have implications for organizations as they seek ways to enhance employees’ engagement in extra-role behaviors.