Because I Care: The Effect of Superiors’ Value Congruence and Compensation Scheme on Target Setting in Social Mission Organizations

• In Event: Organizational Values and Contract Framing

Abstract

This study experimentally examines the effects of superiors’ value-congruence and compensation scheme on target setting. Value congruence is the degree to which superiors personally value the social mission of the organization they work for, such that value congruent superiors personally value the social mission of the organization more than non-value congruent superiors. To motivate subordinates to fulfill the mission of the organization, we predict and find value congruent superiors set higher targets for their subordinates than non-value congruent superiors when paid a fixed wage. We also predict and find performance-based pay moderates the effect of value congruence leading value-congruent and non-value congruent superiors to set similar targets. Lastly, we find our results are driven by superiors with high levels of benevolence. Our findings provide social mission organizations insight into tailoring management compensation schemes for superiors with different levels of value congruence.

Authors

• Wioleta Celina Olczak, Marquette University

• Tyler F Thomas, University of Wisconsin-Madison

• Dimitri Yatsenko, University of Wisconsin-Whitewater