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Compensation or feedback: Motivating performance in multidimensional tasks

Author

Listed:
  • Christ, Margaret H.
  • Emett, Scott A.
  • Tayler, William B.
  • Wood, David A.

Abstract

Employees often perform tasks with multiple dimensions. In this study, we examine how employees' performance on multidimensional tasks differs under different control structures. We conduct two experiments in which we manipulate the presence of compensation controls and the presence of feedback controls on multiple task dimensions. Our findings suggest that when employees are compensated on multiple dimensions they commit to multiple goals and divide their attention among those task dimensions. However, when feedback controls are implemented on one task dimension with compensation controls on another dimension, employees can improve performance on individual dimensions as well as their overall task performance. As a result, we find that employee performance on a multidimensional task can be higher when firms compensate employees on one task dimension and provide feedback on the other task dimension than when firms compensate on both task dimensions. This study highlights the benefits of complementing compensation-based controls (i.e., incentive pay) with non-compensation based controls (e.g., feedback), and provides a theoretical basis to help explain the prevalence of this approach in practice.

Suggested Citation

  • Christ, Margaret H. & Emett, Scott A. & Tayler, William B. & Wood, David A., 2016. "Compensation or feedback: Motivating performance in multidimensional tasks," Accounting, Organizations and Society, Elsevier, vol. 50(C), pages 27-40.
    • Handle: RePEc:eee:aosoci:v:50:y:2016:i:c:p:27-40
    DOI: 10.1016/j.aos.2016.03.003
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    Citations

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    Cited by:

    1. Philipp Schreck, 2020. "Volume or value? How relative performance information affects task strategy and performance," Journal of Business Economics, Springer, vol. 90(5), pages 733-755, June.
    2. Andrew H. Newman & Ivo D. Tafkov & Flora Hailan Zhou, 2020. "The Effects of Incentive Scheme and Task Difficulty on Employees' Altruistic Behavior Outside the Firm†," Contemporary Accounting Research, John Wiley & Sons, vol. 37(3), pages 1512-1535, September.
    3. 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.
    4. Newman, Andrew H. & Tafkov, Ivo D. & Waddoups, Nathan J. & Xiong, Xiaomei Grazia, 2024. "The effect of reward frequency on performance under cash rewards and tangible rewards," Accounting, Organizations and Society, Elsevier, vol. 112(C).
    5. Nathan W. Mecham & Melissa F. Lewis-Western & David A. Wood, 2021. "The Effects of Pornography on Unethical Behavior in Business," Journal of Business Ethics, Springer, vol. 168(1), pages 37-54, January.
    6. Posch, Arthur, 2020. "Integrating risk into control system design: The complementarity between risk-focused results controls and risk-focused information sharing," Accounting, Organizations and Society, Elsevier, vol. 86(C).
    7. Andrejkow, Joanna & Berger, Leslie & Guo, Lan, 2022. "Conscious and nonconscious goal pursuit in multidimensional tasks," Accounting, Organizations and Society, Elsevier, vol. 103(C).
    8. Sania Zafar & Danish Ahmed Siddiqui, 2019. "Factors Affecting Employees Performance and Retention: A Comparative Analysis of Banking and Educational Sector of Karachi," Business Management and Strategy, Macrothink Institute, vol. 10(1), pages 93-124, December.
    9. Elizabeth Sheedy & Le Zhang & Dominik Steffan, 2022. "Scorecards, gateways and rankings: remuneration and conduct in financial services," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(3), pages 3239-3283, September.
    10. Lisa-Marie Wibbeke & Maik Lachmann, 2020. "Psychology in management accounting and control research: an overview of the recent literature," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(3), pages 275-328, September.

    More about this item

    Keywords

    Feedback; Controls; Incentives; Compensation; Multidimensional tasks;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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