Motivating unrewarded task performance: The dual effects of incentives and an organisational value statement in a discretionary task setting

Abstract

The purpose of this study is to examine how the presence of a value statement (an informal control) alters the effect of differing financial incentives (a formal control) in an environment consisting of both rewarded and unrewarded tasks. Results show that under fixed pay, the presence of a value statement motivates performance on important but unrewarded discretionary tasks. Conversely, under piece‐rate compensation, value statements negatively influence performance on unrewarded discretionary tasks. In contemporary work environments, where such discretionary tasks are common and important to organisational effectiveness, these results suggest that informal controls can have an important role in performance outcomes.

Stimulating Proenvironmental Behavior at Work With Informal Controls

“…The results of this paper provide theoretical as well as practical contributions. Particularly, prior studies have examined the role of value statements in employees' behavior (e.g., Kachelmeier et al, 2016;Aguiar 2021;Akinyele et al, 2022;Andrejkow et al, 2022) and the role of formal and informal controls in promoting sustainability and environmental actions (e.g., Baker et al, 2018;Frare et al, 2022). This paper adds to this literature by showing the process through which a value statement can influence employees' PEB.…”

“…Value statement includes "The values, beliefs and social norms which are established to influence employees behavior" (Malmi & Brown, 2008, p. 292). Value statements are used by organizations to communicate prioritized goals and values and provide guidance to employees (Simons, 1995;Kachelmeier et al, 2016;Akinyele et al, 2022). They convey at least one prioritized goal that acts as a subjective norm by exerting social pressure on employees to perform value-consistent behaviors (O'Reilly et al, 1991).…”

“…Value statements are part of the management control package and are classified as a type of informal control (Simons, 1995;Malmi & Brown, 2008;Johnstone, 2018;Andrejkow et al, 2022). This informal control conveys at least one prioritized goal and can act as a behavioral norm that exerts social pressure on employees to perform value-consistent behaviors (O'Reilly et al, 1991;Akinyele et al, 2022). Particularly, value statements can signal the importance of sustainability and environmental actions for the organization (e.g., Arjaliès & Mundy, 2013;Baker et al, 2018).…”

Employee productivity spillovers generated by incentive schemes

“…Monetary and non-monetary incentives foster employee participation in the financial wellbeing of the organisation and subsequently motivate them to improve their level of productivity. However, the allocation of incentives is not mandatory, but depends on business profitability and the managers' priority of serving the interests of shareholders (Akinyele et al, 2021;Bennett & Levinthal, 2017;Pendleton, 2006). Although employee productivity leads to increased profitability, the transfer of benefits to workers in the form of incentives vests in managerial decision-making and the company's capacity to afford these incentives (Farndale et al, 2019).…”

Influence of informal controls on organizational commitment and performance in accounting firms

“…Additionally, the focus on specific management control, such as informal control, concerns the social changes in organizations, which even impact the motivation of those involved (Akinyele et al, 2022). Thus, informal control plays a vital role in enabling the exchange of information between those involved in the process (Chenhall, 2003), facilitates communication between superiors and subordinates, acting as an internal influencer of decision-making (Norris & O'Dwye, 2004), and can be a facilitating control in the face of daily routines and processes of organizations (Jung-Gehling & Strauss, 2018).…”