Management Accounting Section Midyear Meeting

Relative Performance Information, Advice-Seeking, and Trust in the Supervisor

• In Event: Performance Measurement and Evaluation (Experimental)

Abstract

Relative performance information (RPI) is commonly provided or available in many organizations. While RPI can be viewed as a control that firms use to influence employee effort and performance, the presence of RPI may also encourage employees to seek advice from their supervisor, which might in turn breed employees’ trust in their supervisor. This study investigates how RPI influences employee advice-seeking and how such advice-seeking affects trust in their supervisor. Using a laboratory experiment, I find that RPI motivates moderate and high performing employees to seek advice from their supervisor more frequently, whereas low performing employees are not significantly more likely to seek advice with the presence of RPI. I also find that moderate and high performing employees’ advice-seeking frequency positively influences their trust in their supervisor. Mediation analysis reveals that RPI has a positive effect on moderate and high performing employees’ trust in their supervisor and this positive effect is mediated by their advice-seeking behavior. I discuss the implications of my findings on accounting theory and practice.

Author

• Ta-Tung Stephanie Cheng, University of Wyoming