Accounting and Finance

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Browsing Accounting and Finance by Author "Presslee, Adam"

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    Incomplete Incentives, Task Temporality, and Effort Spillover in a Multitask Environment
    (University of Waterloo, 2022-01-07) Lane, Dorian; Presslee, Adam; Webb, Alan
    Incomplete incentive contracts in multitask environments present a significant control challenge of ensuring that employees expend sufficient effort towards all assigned tasks, particularly those that are not directly incentivized. Prior research finds that the severity of this agency issue depends on task temporality such that it is less problematic when the tasks are performed concurrently as opposed to sequentially. I extend the literature by examining how incentive type, task temporality, and performance feedback influence effort spillover onto a second, unincentivized task. Specifically, I predict that goal-based incentives and positive performance feedback on an incentivized task will lead to a stronger positive affective response, which will induce greater effort spillover onto an unincentivized task, under sequential multitasking relative to concurrent multitasking. To test my predictions, I employ a 2 x 2 between-subjects experimental design, where I manipulate the type of incentive contract used for the incentivized task between goal-based or piece-rate incentives and task temporality between concurrent or sequential. Participants complete two real-effort tasks where Task 1 performance is incentivized, and Task 2 performance is unincentivized. I examine the impact of my manipulations on participants’ affective responses to performance feedback on the incentivized task and their performance on the unincentivized task, which proxies for task effort, as my dependent variables of interest. I find that goal-based incentives under sequential multitasking following goal attainment does lead to greater effort spillover onto an unincentivized task under sequential multitasking compared to concurrent multitasking. Consistent with my theory, I find that positive affect from performance feedback is positively associated with effort spillover onto an unincentivized task. I further predict that goal-based incentives and negative performance feedback on an incentivized task is associated with a stronger negative affective response, which will induce lower effort spillover onto an unincentivized task under sequential multitasking relative to concurrent multitasking. However, I do not find support for the prediction. Specifically, I do not find evidence that negative affect following negative performance feedback is associated with negative effort spillover onto an unincentivized task. The findings from this study highlight the importance of examining how features of the management control system (i.e., incentive type, performance feedback, and job design) can help to address a costly agency problem in multitask environments.
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    Subjectivity in Performance Evaluation and Group Identity as Antecedents of Employee Overwork
    (University of Waterloo, 2023-08-18) Mokhtar, Ala; Bauer, Tim; Presslee, Adam
    Employees often overwork by working longer than contractual or statutory standard working time for no immediate additional monetary gain. Despite the prevalence of overwork in firms, little is understood about why employees choose to work such long hours. Firms often have high overwork levels despite management encouraging employees to make use of work-life balance policies, and employees at such firms often believe that their long work hours are self-imposed. Employees likely would not feel that way if they are given explicit management directives to work long hours, indicating that other factors in the organization lead employees to overwork. I use an experiment to investigate how two key features of a firm’s management control system – the subjectivity in performance evaluation and the strength of employees’ identity with their colleagues (hereafter, group identity) – affect employees’ level of overwork. I find that the effect of subjectivity in performance evaluation on the level of overwork is increasing in group identity strength, such that a positive effect is present only when group identity is stronger and not when it is weaker. I also find that group identity has a significant positive effect on the level of overwork at higher but not lower levels of subjectivity in performance evaluation. These results largely support my hypotheses. Finally, I employ a secondary experiment and provide evidence that subjectivity in performance evaluation impacts the level of overwork primarily through the effort heuristic mechanism. My study is important because understanding factors within firms that propagate overwork is consequential for firms that want to discourage such overwork due to its negative consequences. Understanding these factors also allows firms to have a more complete understanding of what motivates their employees.