Management Accounting Section Midyear Meeting

When the Boss Becomes the Referee: The Effect of Competition on Employee Responses to Monitoring Controls

• In Event: Employee Selection and Competition

Abstract

Managers frequently use monitoring controls to align employee actions with organizational goals. However, prior research has widely documented employees respond negatively to managers’ use of monitoring. To help reconcile these empirical facts, I examine whether and how peer competition affects employee responses to managers’ monitoring control decisions. Reporting the results of two experiments, I find that increasing the intensity of competition between peers reduces employee negative reciprocity when managers’ choose to impose a monitoring control. In fact, in the first experiment employees positively reciprocated the manager’s decision to impose the control under high peer competition while negatively reciprocating under low peer competition. In the second experiment, I document that under high (low) competitive settings employee reciprocity responses are (not) driven by their perceived fairness of the monitoring control. Collectively, my results aid our understanding by explaining how and under what circumstances monitoring controls can be more or less beneficial.

Author

• Jordan Samet, University of Illinois Urbana-Champaign