Behavioral Responses to Multiple Performance Measures: Does Personality Matter?

• In Event: Management Pay, Personality, and Performance

Abstract

The younger generation of employees is characterized by significantly different personality traits, in particular, higher levels of narcissism. While management literature has devoted ample attention to these traits, the accounting literature has only recently started investigating the implications of personality traits for contemporary management accounting practices. Following psychology literature, according to which personality affects behavioral responses to work settings, we analyze the behavioral responses to performance measurement systems (PMS) that balance multiple dimensions. First, we hypothesize that individuals experience conflict and ambiguity when PMS require them to balance multiple performance dimensions. Second, we hypothesize that personality traits moderate behavioral responses to PMS. Our experimental results indicate that the inclusion of multiple measurement dimensions in PMS increases the conflict experienced by individuals, causing a negative effect on individual performance. Consistent with our hypotheses, we also find that narcissistic individuals with high low avoidance motivation are more sensitive to differences in PMS balancing multiple dimensions. For more narcissistic individuals, conflict, ambiguity, and performance were more sensitive to the PMS to which participants were randomly assigned. These results lead us to conclude that using combinations of performance dimensions in PMS can cause individuals to experience conflict and ambiguity, especially for narcissistic individuals and individuals with low avoidance motivation. Hence, we discuss implications for the design and implementation of combination of performance dimensions in PMS.

Authors

• Kelsey Kay Dworkis, University of Denver

• Lorenzo Patelli, University of Denver