TY - JOUR
T1 - Managerial intentions for and employee perceptions of group-based incentives
T2 - Social exchange theory-based interpretations
AU - Moilanen, Sinikka
AU - Ikäheimo, Seppo
PY - 2019/11/4
Y1 - 2019/11/4
N2 - Purpose: This paper aims to interpret and compare managerial intentions for and employee perceptions of group-based incentive systems. Design/methodology/approach: The data comprise interviews with managers and employees in four Finnish firms with experience of company-wide incentive systems involving profit-sharing and team-based rewards. Benefitting from social exchange theory, managers’ intentions and employees’ perceptions are examined. Findings: Managers’ and employees’ views resemble each other concerning profit-sharing as reflecting reciprocity rooted in perceived distributive fairness, whereas examination of the team-based rewards revealed impediments in reciprocity. While managerial intentions for team-based rewards refer to social exchange with economic intensity via selection of controllable performance measurements aimed at making individual-level effort count, the employees’ perceptions deem such metrics non-controllable, reflecting perceived distributive and procedural unfairness. Practical implications: Profit-sharing seems to create fair social obligation and goal congruence between managers and employees, whereas team-based incentives easily suffer from unfairness, reducing their effectiveness. Originality/value: Distinguishing between managerial intentions and employee perceptions pertaining to incentive systems facilitated in-depth exploration of the social exchange inherent in them, conceptualized in terms of economic intensity, fairness and controllability. With this lens, qualitative analysis revealed differences in interpretations of controllability and fairness between the managerial intentions and employee perceptions. The central contribution to scholarship takes the form of interpretations reflecting upon these key findings.
AB - Purpose: This paper aims to interpret and compare managerial intentions for and employee perceptions of group-based incentive systems. Design/methodology/approach: The data comprise interviews with managers and employees in four Finnish firms with experience of company-wide incentive systems involving profit-sharing and team-based rewards. Benefitting from social exchange theory, managers’ intentions and employees’ perceptions are examined. Findings: Managers’ and employees’ views resemble each other concerning profit-sharing as reflecting reciprocity rooted in perceived distributive fairness, whereas examination of the team-based rewards revealed impediments in reciprocity. While managerial intentions for team-based rewards refer to social exchange with economic intensity via selection of controllable performance measurements aimed at making individual-level effort count, the employees’ perceptions deem such metrics non-controllable, reflecting perceived distributive and procedural unfairness. Practical implications: Profit-sharing seems to create fair social obligation and goal congruence between managers and employees, whereas team-based incentives easily suffer from unfairness, reducing their effectiveness. Originality/value: Distinguishing between managerial intentions and employee perceptions pertaining to incentive systems facilitated in-depth exploration of the social exchange inherent in them, conceptualized in terms of economic intensity, fairness and controllability. With this lens, qualitative analysis revealed differences in interpretations of controllability and fairness between the managerial intentions and employee perceptions. The central contribution to scholarship takes the form of interpretations reflecting upon these key findings.
KW - Employee perception
KW - Managerial intention
KW - Profit-sharing
KW - Social exchange theory
KW - Team-based reward
UR - http://www.scopus.com/inward/record.url?scp=85075447180&partnerID=8YFLogxK
U2 - 10.1108/JAOC-04-2019-0043
DO - 10.1108/JAOC-04-2019-0043
M3 - Article
AN - SCOPUS:85075447180
SN - 1832-5912
VL - 15
SP - 605
EP - 625
JO - Journal of Accounting and Organizational Change
JF - Journal of Accounting and Organizational Change
IS - 4
ER -