Interaction of Information and Control Systems: How the Motivational Effect of RPI Vanishes in a Controlled Environment

• In Event: 5.03 Behavioral Management Accounting Research

Abstract

We investigate the motivational effect of relative performance information (RPI) under working environments with different degrees of control. We predict that in controlled environments, RPI is a less effective instrument for motivating employees. We conduct a laboratory experiment to test our prediction. Prior research shows that RPI has a positive effect on effort and performance in non-controlled working environments. After successfully replicating this finding, we examine RPI’s effectiveness in a highly controlled environment that we operationalize by monitoring the participants using video surveillance. We find that the motivational effect of RPI completely vanishes in such an environment. Our findings have important implications for firms using RPI and reveal the need to further investigate the effectiveness of such incentive systems in controlled environments.

Authors

• Ivo Schedlinsky, University of Muenster

• Maximilian Schmidt, University of Giessen

• Arnt Woehrmann, University of Giessen