The Effects of Reference Group Size on Competitive Employee Effort (Dissertation)
Committee: Geoff Sprinkle & Lori Bhaskar (co-chairs), Jason Brown, Joe Burke, and Ed Hirt
Outstanding Dissertation Award winner - 2025 AAA Accounting Behavior and Organizations Research Conference
Abstract: I develop theory and conduct a laboratory experiment to examine how the number of employees in a competition (reference group size) affects the level of effort that employees exert to compete over monetary bonuses and social recognition. While prior research has found that increasing reference group size tends to decrease effort in winner-take-all tournaments, my results suggest that increasing reference group size can motivate higher effort under both a relative performance evaluation (RPE) bonus contract and a fixed-wage relative performance information (RPI) contract. This effect appears to be driven by increased rank-effort sensitivity in larger reference groups, which motivates employees to increase and maintain higher levels of effort over time. I also find that the incremental positive effects of RPE bonus incentives are mitigated by reference group size in my setting. Overall, my study has implications for how managers organize and incentivize competition within their organizations.
How Do Group Size and Group Relative Performance Information Affect Managerial Reporting?
Co-authors: Lori Bhaskar, Indiana University; Geoff Sprinkle, Indiana University; Dan Way, Villanova University
Outstanding Paper Award winner - 2023 AAA Management Accounting Section Midyear Meeting
Abstract: The revelation of private information is an important agency friction in firms. Managerial accounting research has examined the effects of control choices on managers’ honesty, finding that honesty is greater when managers are grouped for reporting and profit-sharing purposes. We examine how two important group-level control choices, group size and group relative performance information (RPI), influence managers’ reporting honesty. We find that honesty is significantly lower in larger groups than in smaller groups. Further, we not only find that RPI is less effective at maintaining honesty over time in larger groups as compared to smaller groups, but rather that RPI exacerbates the decrease in honesty over time in larger groups. Our findings are consistent with our theory that pressures to adhere to social norms for honesty likely decrease as group size increases and as RPI signals the relatively dishonest reporting of others. Our study contributes to the managerial accounting literature by identifying larger group size as an important and overlooked factor that can impair managers’ reporting honesty, as well as identifying that providing group RPI can have either beneficial or harmful effects, depending on the size of the group. As such, our study also has practical implications for an organization’s architecture and how performance is measured, as well as for the efficacy of providing group RPI.
Productivity versus Efficiency: The Effect of Incentive Frame on Target Setting in Participative Budgets
Co-authors: Jake Andrassy, Indiana University; Jason Brown, Indiana University; Ashley Sauciuc, Indiana University
David A. Bush Best Paper Award winner – 2025 Palmetto Symposium on Experimental Accounting Research
Abstract: Firms typically design incentive systems to motivate employees and advance firm objectives, including productivity (i.e., maximizing output) and efficiency (i.e., minimizing input). However, there remains little empirical research on the potential psychological effects of adopting a productivity versus efficiency focus on employee risk perceptions and decision-making. To address this important gap, we examine how these different incentive foci affect employee target setting under participative budgets. We predict and find that employees perceive efficiency incentives as riskier than productivity incentives, leading to lower target setting. This effect is robust across different levels of outcome uncertainty. Moreover, employees are significantly more likely to achieve their target and have lower error rates under productivity incentives, despite setting more challenging targets. Results from a supplemental experiment further validate that employees strongly prefer productivity incentives over efficiency incentives. Our findings have important implications for organizations and compensation contracting.
Making Workplace Giving Visible: The Effects of Employee Giving Information on Prosocial Norms and Behavior
Co-authors: Eric Chan, University of Texas at Austin; Kyle Mao, Texas State University
Abstract: Workplace giving programs are widely used to facilitate employee contributions to charitable causes. Organizations vary in whether and how they internally disclose employee giving information (EGI), yet little is known about how different forms of such disclosures influences the development of descriptive prosocial norms and employees’ prosocial workplace behavior. Using a laboratory experiment, we examine two common forms of EGI: 1) Categorical EGI, which lists donors without indicating their donation amounts, and 2) Ranked EGI, which ranks employees by the size of their donations. We find that while both forms of EGI increase employee participation in workplace giving, they differ significantly in how they shape prosocial norms and affect subsequent helping behavior. Categorical EGI, by highlighting the binary contrast between donors and non-donors, weakens the formation of prosocial norms and reduces employee helping by drawing attention to those who did not donate. In contrast, Ranked EGI avoids this adverse effect by shifting attention toward the top donors as prosocial exemplars. Mediation analysis supports our theory that changes in perceived prosocial norms mediate the observed effects. These findings offer both theoretical and practical insights into how different forms of EGI shape prosocial behavior in workplace settings.
The Effects of Profit- vs. Purpose-driven Decision Frames and Project Stage on Manager Risk-taking
Co-authors: Billy Brewster, Texas State University; Mandy Ellison, Texas State University; Kyle Mao, Texas State University
Data collection phase
Productivity versus Efficiency: The Effect of Incentive Frame on Managerial Reporting
Co-authors: Jake Andrassy, Indiana University; Jason Brown, Indiana University; Ashley Sauciuc, Indiana University
Design phase