Accounting and Financehttp://hdl.handle.net/10012/98682024-03-28T18:42:22Z2024-03-28T18:42:22ZSubjectivity in Performance Evaluation and Group Identity as Antecedents of Employee OverworkMokhtar, Alahttp://hdl.handle.net/10012/197172023-08-19T02:31:15Z2023-08-18T00:00:00ZSubjectivity in Performance Evaluation and Group Identity as Antecedents of Employee Overwork
Mokhtar, Ala
Employees often overwork by working longer than contractual or statutory standard working time for no immediate additional monetary gain. Despite the prevalence of overwork in firms, little is understood about why employees choose to work such long hours. Firms often have high overwork levels despite management encouraging employees to make use of work-life balance policies, and employees at such firms often believe that their long work hours are self-imposed. Employees likely would not feel that way if they are given explicit management directives to work long hours, indicating that other factors in the organization lead employees to overwork. I use an experiment to investigate how two key features of a firm’s management control system – the subjectivity in performance evaluation and the strength of employees’ identity with their colleagues (hereafter, group identity) – affect employees’ level of overwork. I find that the effect of subjectivity in performance evaluation on the level of overwork is increasing in group identity strength, such that a positive effect is present only when group identity is stronger and not when it is weaker. I also find that group identity has a significant positive effect on the level of overwork at higher but not lower levels of subjectivity in performance evaluation. These results largely support my hypotheses. Finally, I employ a secondary experiment and provide evidence that subjectivity in performance evaluation impacts the level of overwork primarily through the effort heuristic mechanism. My study is important because understanding factors within firms that propagate overwork is consequential for firms that want to discourage such overwork due to its negative consequences. Understanding these factors also allows firms to have a more complete understanding of what motivates their employees.
2023-08-18T00:00:00ZCalibration Committees and Rating Distribution Guidance Effects on Leniency Bias in Subjective Performance EvaluationsPatterson, Katharinehttp://hdl.handle.net/10012/192892023-04-20T02:31:12Z2023-04-19T00:00:00ZCalibration Committees and Rating Distribution Guidance Effects on Leniency Bias in Subjective Performance Evaluations
Patterson, Katharine
Firms use both calibration committees and rating distribution guidance to reduce leniency bias in subjective performance ratings. Leniency bias is the tendency to provide subordinates with higher ratings than deserved which can weaken the link between incentives and effort, leading to suboptimal and subordinate performance. I employ a 2x2 online experiment to assess how the presence versus absence of peer calibration committees [PCCs] and rating distribution guidance [RDG] affects leniency bias present in supervisors’ ratings of subordinates’ performance. I find support that supervisors may display more leniency in ratings prepared in anticipation of a PCC, especially among low performers. As the increased bias appears to impact low-performers, this may create additional fairness concerns for moderate and high-performers, which could demotivate these subordinates. Next, I find support that rating distribution guidance does have a main effect of reducing the leniency bias displayed among low and high performers. Further, using planned contrast testing, I find support for my predicted pattern of results for low performers. That is, the presence of a PCC has a main effect of increasing leniency bias, the presence of RDG has the main effect of reducing leniency bias, and the interactive effect such that when a PCC is present, the presence of RDG weakens the effect of PCCs on leniency bias. This finding indicates that rating distribution guidance may be helpful in settings with a PCC.
2023-04-19T00:00:00ZThe Valuation of Economic Earnings and Income Shifting of U.S. Multinationals in Domestic and Foreign JurisdictionsPinto, Karenhttp://hdl.handle.net/10012/180732022-02-16T03:31:09Z2022-02-15T00:00:00ZThe Valuation of Economic Earnings and Income Shifting of U.S. Multinationals in Domestic and Foreign Jurisdictions
Pinto, Karen
I study U.S. multinationals' economic earnings and income shifting across their domestic and foreign jurisdictions. This study develops the concept of economic earnings, measures economic and shifted earnings, tests their market valuation, and tests differences in valuation across investor types. I conceptualize economic earnings by distinguishing between domestic and foreign earnings reported by firms and earnings created in these jurisdictions. I then measure domestic and foreign economic earnings by estimating country-specific (i) locations and (ii) economic earnings for U.S. multinationals. I estimate country-level economic earnings using a productivity function of domestic-only firms in each country. I test the validity of the economic earnings estimation procedure using a sample of domestic-only firms across 81 countries. The income shifting measure is the difference between reported and economic earnings. I theoretically and empirically compare the income shifting measures created in this study to existing measures and test their association with tax avoidance. For the valuation tests, I develop two earnings decomposition models that decompose total earnings into (a) domestic and foreign economic earnings and (b) shifted and resident components of earnings. I find that domestic and foreign economic earnings are value-relevant and valued relatively differently than domestic and foreign reported earnings. I fail to find evidence that income shifted into and out of the U.S. are value-relevant. I find that more sophisticated investors are associated with the valuation of income shifting and find, contrary to my predictions, that less sophisticated investors recognize underlying economic earnings components.
2022-02-15T00:00:00ZIncomplete Incentives, Task Temporality, and Effort Spillover in a Multitask EnvironmentLane, Dorianhttp://hdl.handle.net/10012/178462022-01-08T03:31:42Z2022-01-07T00:00:00ZIncomplete Incentives, Task Temporality, and Effort Spillover in a Multitask Environment
Lane, Dorian
Incomplete incentive contracts in multitask environments present a significant control challenge of ensuring that employees expend sufficient effort towards all assigned tasks, particularly those that are not directly incentivized. Prior research finds that the severity of this agency issue depends on task temporality such that it is less problematic when the tasks are performed concurrently as opposed to sequentially. I extend the literature by examining how incentive type, task temporality, and performance feedback influence effort spillover onto a second, unincentivized task. Specifically, I predict that goal-based incentives and positive performance feedback on an incentivized task will lead to a stronger positive affective response, which will induce greater effort spillover onto an unincentivized task, under sequential multitasking relative to concurrent multitasking. To test my predictions, I employ a 2 x 2 between-subjects experimental design, where I manipulate the type of incentive contract used for the incentivized task between goal-based or piece-rate incentives and task temporality between concurrent or sequential. Participants complete two real-effort tasks where Task 1 performance is incentivized, and Task 2 performance is unincentivized. I examine the impact of my manipulations on participants’ affective responses to performance feedback on the incentivized task and their performance on the unincentivized task, which proxies for task effort, as my dependent variables of interest. I find that goal-based incentives under sequential multitasking following goal attainment does lead to greater effort spillover onto an unincentivized task under sequential multitasking compared to concurrent multitasking. Consistent with my theory, I find that positive affect from performance feedback is positively associated with effort spillover onto an unincentivized task. I further predict that goal-based incentives and negative performance feedback on an incentivized task is associated with a stronger negative affective response, which will induce lower effort spillover onto an unincentivized task under sequential multitasking relative to concurrent multitasking. However, I do not find support for the prediction. Specifically, I do not find evidence that negative affect following negative performance feedback is associated with negative effort spillover onto an unincentivized task. The findings from this study highlight the importance of examining how features of the management control system (i.e., incentive type, performance feedback, and job design) can help to address a costly agency problem in multitask environments.
2022-01-07T00:00:00Z