Leading with Generosity and Responsibility through Reward Allocation Decisions in Teams

Leadership generosity and responsibility are crucial elements in organizational management, particularly when leaders allocate rewards among team members. Through theoretical modeling and experimental validation, we examine leaders' allocation decisions before the project begins and after its outcomes are realized, and how these behavioral tendencies depend on personal traits. Using a preregistered randomized controlled experiment with 520 participants, we examine leaders' tendency to take a smaller share for themselves---enhancing effort through generous commitment before the project starts and signaling responsibility after poor performance---as well as the role of personal traits in shaping behavioral styles. Our theoretical framework predicts that more altruistic leaders will demonstrate stronger generous commitment while less altruistic leaders will demonstrate greater responsibility following negative outcomes. The empirical findings largely support these predictions. Female leaders show more generosity, while both genders demonstrate responsibility by reducing self-allocation following negative outcomes, albeit through different psychological mechanisms. Personality traits, especially altruism, as well as other psychological factors, moderate these behaviors, with traits traditionally associated with ``strong'' leadership often negatively related to responsibility. These findings provide insights into leadership decision-making, with implications for organizational design and leadership development.