Research

Labor Market Competition and Measure Weighting in Job Promotion Decisions

Solo authored.

Prior research explores how managers weight measures of performance and potential in job promotion decisions. In this study, I investigate the effect of the labor market on these measure weights. I expect labor market competition to increase the salience of potential employee departures and, consequently, managers’ focus on retention. Drawing on theory of loss aversion, I predict that managers will try to retain high performers by overweighting measures of performance, relative to measures of potential, in job promotion decisions. I also predict that this effect can be mitigated by requiring managers to explicitly, rather than implicitly, weight measures used in promotion decisions. Experimental results support these predictions but highlight other potential consequences of using explicit weighting. This study extends prior literature by demonstrating how external labor market conditions can influence internal labor decisions. Ultimately, the findings suggest that labor market competition may increase the likelihood of suboptimal promotion decisions.

Nudging Away the Gender Pay Gap: The Role of Pay Raise Budget Framing

with Karl Schuhmacher and Kristy Towry. Revise and resubmit at The Accounting Review.

Progress toward eliminating the gender pay gap has slowed in the last two decades. This study examines whether a common control choice - framing pay raise budgets in percentages - inadvertently contributes to perpetuating the gender pay gap. We predict that when the pay raise budget is framed as a percentage (the percentage frame), managers anchor individual raises on that budget percentage. We propose a behavioral nudge by framing the pay raise budget as an absolute amount (the dollar frame), leading managers to anchor individual raises on an even split of the overall budget. We hypothesize and find in an experiment that the dollar frame perpetuates the gender pay gap less than the percentage frame. We also explore a salary frame that, similar to the dollar frame, leads to a reduction in the gender pay gap. Our study offers a simple, cost-effective way to limit the perpetuation of the gender pay gap.

Paper available on SSRN.

Timing is Everything: Congruence, Controllability, and Performance Measure Weighting

with Gary Hecht, Bill Tayler, and Kristy Towry.

We investigate whether the weights managers place on performance measures for performance-based compensation depend on whether weights are determined at the beginning or end of the performance period. We propose that managers frame the weighting decision differently depending on timing. Specifically, prior to employee effort, managers frame the decision as intended to align employee effort to firm objectives, whereas after employees have exerted effort, managers frame the weighting decision as intended to evaluate employee effort. Thus, we expect, and find, that managers weight measures that are more congruent with firm objectives more heavily when weightings are determined ex ante (before employee effort) and weight measures that are more controllable more heavily when weightings are determined ex post. Further, we find that this effect of timing is robust to the availability and valence of outcome information, which is often readily available in ex post measure weighting scenarios. Ultimately, our study speaks to the unexplored – but fundamental – effect of timing on managers’ performance measure weighting choices. While managerial accounting literature largely views timing as an assumption or an artifact of context, timing is often an important choice that has profound implications for the structure of performance evaluation and compensation systems.

Paper available on SSRN.

Autism and the Efficacy of Performance-Based Incentives

with Karen Sedatole, Mikle South, and Kristy Towry

Manager Status Motives and Assessments of Employee Promotability

with Kyle Broderick

Workplace Diversity Benchmarks and Employee Perceptions of Senior Management

with Karl Schuhmacher

Human Capital Accounting and Manager Perceptions of Employee Ability

with Myrna Modolon Lima

Strategic Alignment, Performance, and the Moderating Effect of Regulatory Fit

with Steve Smith and Travis Steadman. Forthcoming in Journal of Management Accounting Research. (Master's degree project)

We examine how the alignment of performance measurement and strategy affects performance on a multidimensional task. Our experiment varies both the strategy (speed versus accuracy) of the hypothetical firm for which participants work and the individual performance measure that is reported to them, creating two conditions of clear alignment and two of clear misalignment. We find that although workers are responsive to the performance measure regardless of its alignment, they are also sensitive to the strategy such that costly alignment effects are observed. We also predict and find that workers respond asymmetrically to misalignment in accuracy performance but not in speed performance, demonstrating that the effects of misaligned performance measurement depend on the fit between firm strategy and the nature of the task being performed.