A Moderated Mediation Model of the Fit Between Management Regulatory Focuses and Employee Incentive Contracts on Employee Efforts

• In Event: Inducing Employee Effort

Abstract

The purpose of this study is to investigate the effect of the fit between management regulatory focuses and employees’ incentive contracts on employees’ efforts in an experiment setting. Further, this study provides evidence that management regulatory focus is the primary factor, and the fit is the secondary factor in determining employees’ regulatory focuses. Drawing on regulatory focus theory, this study examines how the regulatory fit between management regulatory focuses and incentive contracts affect employees’ efforts using a moderated mediation model. The results suggest that management regulatory focuses affect employees’ efforts via employees’ regulatory focuses, and the association is moderated by incentive contracts, supporting the hypotheses of the study. This study has several important contributions. First, this study extends the prior literature on both the management characteristics and the incentive contracts by examining the two controls together. Second, using the results of this study, organizations can garner benefits from the established incentive structures in their organizations. Third, this study provides evidence that employees’ regulatory focuses can be manipulated through management’s top-down communication to employees. Forth, the study presents a detailed process of how these two controls interact and affect employees’ efforts.

Authors

• Sohee Kim, University of Kentucky

• Jeremy Lill, University of Kansas