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, and prior research finds that managers’ honesty is greater when they are grouped for reporting and profit-sharing purposes. Using a laboratory experiment, we examine how two important group-level control choices, group size and group relative performance information (RPI), influence managerial honesty. We find that honesty is significantly lower in larger groups than in smaller groups, and that the effect of RPI on honesty depends on group size. While RPI mitigates decreases in honesty over time in smaller groups, RPI exacerbates decreases in honesty over time in larger groups. Process-level analyses provide evidence consistent with our theory that social norms for honesty weaken, and self-interested norms strengthen, as group size increases and as RPI signals the relatively dishonest reporting of others. Our study contributes to the managerial accounting literature by highlighting the joint effects on honesty of group size and group RPI, demonstrating how the relative costs and benefits of forming smaller or larger groups for reporting purposes are influenced in important ways by the presence of 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. Moreover, consistent with our theory, this effect disappears in the absence of outcome uncertainty. We also find employees are significantly less likely to achieve their target and have higher error rates under efficiency incentives, despite setting easier targets. Overall, our findings suggest that efficiency incentives, relative to productivity incentives, can have detrimental effects on target setting and subsequent performance in participative budgeting settings.
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 disclose employee giving information (EGI) internally, yet little is known about how different forms of such disclosures influence the strength of descriptive prosocial norms in the workplace and employees’ subsequent prosocial behavior. Using an interactive 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 charitable giving, they differ significantly in how they influence the formation of prosocial norms and employees’ helping behavior. Our results show that Categorical EGI weakens prosocial norms and reduces employee helping by highlighting the binary contrast between donors and non-donors, thereby 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 these effects. Overall, our findings offer both theoretical and practical insights into how different forms of EGI shape prosocial behavior in the workplace.
When Doing Good Changes Risk Taking: Purpose-Driven Projects and Managerial Responses to Performance Shortfalls
Co-authors: Billy Brewster, Texas State University; Mandy Ellison, Texas State University; Kyle Mao, Texas State University
Abstract: Prior research suggests that managers become more willing to take risks when performance falls below a salient goal. However, this prediction has largely been examined in profit-driven settings, where project outcomes are evaluated primarily in terms of financial performance. We examine whether this goal-based risk-taking pattern extends to purpose-driven projects, where the downside of risk may involve failing to deliver intended benefits to stakeholders. In an online experiment, participants with managerial or executive work experience assume the role of a product manager and choose between a higher-risk, higher-upside project and a safer project that offers more certain but smaller incremental progress. We manipulate project type, comparing a purpose-driven project focused on improving factory workers’ health and safety with a profit-driven project focused on increasing product sales. We also manipulate current performance relative to an internal organizational goal. Consistent with prospect theory, participants in profit-driven projects are more likely to select the riskier project when performance falls below the goal than when performance exceeds it. However, this pattern does not emerge in purpose-driven projects. Instead, participants evaluating purpose-driven projects exhibit similar levels of risk taking regardless of goal progress and are less likely than participants in profit-driven projects to select the riskier option when performance is below goal. These findings suggest that purpose-driven projects may attenuate traditional goal-based risk-taking effects, as the potential downside of risky action may carry moral and stakeholder-related consequences.
Productivity versus Efficiency: The Effect of Incentive Focus and Employee Status on Workplace Misconduct
Co-authors: Jake Andrassy, Indiana University; Jason Brown, Indiana University; Ashley Sauciuc, Indiana University
Design phase