Management Accounting Section Midyear Meeting

Narrative Reporting in a Team Environment

• In Event: Subjective Performance Evaluation

Abstract

In this study we examine the effect of narrative reporting and subjective performance-based incentives on operating distortion in a team setting. We manipulate narrative reporting type as individual, team lead, or absent and incentive type as individual bonus or team bonus. We find that the documented effect of individual narrative reporting when employees receive individual bonuses is robust in a team setting. In addition, we find that team lead narrative reporting can serve as an efficient substitute for individual narrative reporting when employees are given individual bonuses. Boundary conditions are identified, as we find that team bonuses mitigate the operating distortion decreasing effects of both types of narrative reporting, except for when employees have strong trust in their team lead and there is team lead narrative reporting.

Authors

• Jeremiah Bentley, University of Massachusetts Amherst

• Conner R. Blake, University of Massachusetts-Amherst