Management Accounting Section Midyear Meeting

The Spillover Effect of Adopting a Formalized Culture-Fit Measurement System in the Employee Selection Process

• In Event: Field Experiments and Field Studies

Abstract

Many organizations rely on employee selection as a management control system to diffuse organizational culture. While prior literature has focused on the role of an employee selection system in selecting new employees who are more aligned with organizational values, whether and how such system would influence existing employees remain scantly studied. Using proprietary data, I investigate the spillover effect of implementing a culture-fit measurement system in the employee selection process on existing employees’ performance. I exploit the staggered feature of the adoption of the system and find that the culture-fit measurement system has a positive effect on existing employees’ performance, especially when the percent of new employees selected through that system reaches a critical mass. The positive spillover effect is stronger 1) when existing employees are more likely to learn from new employees selected through the system, and 2) when existing employees face less culture clash. Taken together, this study implies that an employee selection system that sorts potential employees based on their value alignment may also exert spillover effects on existing employees’ performance. Such spillover effects may provide a novel perspective on how to diffuse a desirable organizational culture.

Author

• Wei Cai, Columbia University