Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The effect of feedback, assigned goal levels and compensation schemes on task performance

The effect of feedback, assigned goal levels and compensation schemes on task performance The purpose of this paper is to examine the joint effects of performance feedback, assigned goal levels and types of compensation schemes (i.e. fixed-pay, piece-rate and goal attainment bonus) on subordinates’ task performance.Design/methodology/approachA laboratory experiment was employed to collect data. The subjects consisted of a total of 133 Australian business executives. The study used ANCOVA for data analyses, controlling subject’s practice trial scores as covariate.FindingsThe results provide strong support for a three-way interaction between performance feedback, assigned goal levels and types of compensation schemes on subordinates’ task performance. Specifically, the results reveal that the reliance of a piece-rate compensation scheme resulted in higher task performance when compared to fixed-pay and goal attainment bonus compensation schemes in the presence of performance feedback and assigned difficult goal levels situations. In addition, the results reveal that a goal attainment bonus compensation scheme leads to higher task performance when compared to a fixed-pay compensation scheme in the presence of performance feedback and assigned difficult goal levels situations.Originality/valueThese findings have important implications for compensation schemes design in firms that aim to achieve higher employees’ performance and organizational effectiveness. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asian Review of Accounting Emerald Publishing

The effect of feedback, assigned goal levels and compensation schemes on task performance

Chong, Vincent; Leung, Simon Tak-wing
Asian Review of Accounting , Volume 26 (3): 22 – Aug 6, 2018
Download PDF
22 pages

Loading next page...
 
/lp/emerald-publishing/the-effect-of-feedback-assigned-goal-levels-and-compensation-schemes-FjimxTyjg8
Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1321-7348
DOI
10.1108/ara-09-2017-0142
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to examine the joint effects of performance feedback, assigned goal levels and types of compensation schemes (i.e. fixed-pay, piece-rate and goal attainment bonus) on subordinates’ task performance.Design/methodology/approachA laboratory experiment was employed to collect data. The subjects consisted of a total of 133 Australian business executives. The study used ANCOVA for data analyses, controlling subject’s practice trial scores as covariate.FindingsThe results provide strong support for a three-way interaction between performance feedback, assigned goal levels and types of compensation schemes on subordinates’ task performance. Specifically, the results reveal that the reliance of a piece-rate compensation scheme resulted in higher task performance when compared to fixed-pay and goal attainment bonus compensation schemes in the presence of performance feedback and assigned difficult goal levels situations. In addition, the results reveal that a goal attainment bonus compensation scheme leads to higher task performance when compared to a fixed-pay compensation scheme in the presence of performance feedback and assigned difficult goal levels situations.Originality/valueThese findings have important implications for compensation schemes design in firms that aim to achieve higher employees’ performance and organizational effectiveness.

Journal

Asian Review of Accounting – Emerald Publishing

Published: Aug 6, 2018

Keywords: Feedback; Task performance; Assigned goal levels; Compensation schemes

References

  • Functional fixation revisited: the effects of feedback and repeated measures design on information processing changes in response to an accounting change
    Arunachalam, V.; Beck, G.
  • Pressure and performance in accounting decision settings: paradoxical effects of incentives, feedbacks and justification
    Ashton, R.H.
  • Students as surrogates in behavioral accounting research: some evidence
    Ashton, R.H.; Kramer, S.S.
  • The moderating effects of task complexity and task attractiveness on the impact of monetary incentives in repeated tasks
    Bailey, C.D.; Fessler, N.J.
  • A critical objective review of performance feedback
    Balcazar, F.; Hopkins, B.; Suarez, Y.
  • A field study of the impact of a performance-based incentive plan
    Banker, R.D.; Lee, S.; Potter, G.
  • An empirical analysis of continuing improvements following the implementation of a performance-based compensation plan
    Banker, R.D.; Lee, S.; Potter, G.; Srinivasan, D.
  • The effects of monetary incentives on effort and task performance: theories, evidence and a framework for research
    Bonner, S.E.; Sprinkle, G.B.
  • A review of the effects of financial incentives on performance in laboratory tasks: implications for management accounting
    Bonner, S.E.; Hastie, R.; Sprinkle, G.B.; Young, S.M.
  • The effects of alternative types of feedback on product-related decision performance: a research note
    Briers, M.L.; Chow, C.W.; Hwang, R.E.; Luckett, P.F.
  • The effects of information feedback signage and incentive contingency upon performance and goals
    Bruwelheide, L.R.
  • Contrast coding: a refinement of ANOVA in behavioral analysis
    Buckless, F.A.; Ravenscroft, S.P.
  • The effects of goal-contingent payment on the performance of a complex task
    Campbell, D.J.
  • The performance implication of goal achievability in incentive contracts and feedback
    Chen, Y.; Jermias, J.; Lee, G.
  • The impact of reliance on incentive-based compensation schemes, information asymmetry and organizational commitment on managerial performance
    Chong, V.K.; Eggleton, I.R.C.
  • The effects of job standard tightness and compensation scheme on performance: an exploration of linkages
    Chow, C.W.
  • Compensation or feedback: motivating performance in multidimensional tasks
    Christ, M.H.; Emett, S.A.; Tayler, W.B.; Wood, D.A.
  • Contracting frame and individual behavior: experimental evidence
    Church, B.K.; Libby, T.; Zhang, P.
  • Compensation schemes, skill level, and task performance: an experimental examination
    Dillard, J.F.; Fisher, J.G.
  • Effects of goal difficulty, self-set goals and monetary rewards on dual task performance
    Erez, M.; Gopher, D.; Arzi, N.
  • Contracting on contemporaneous versus forward-looking measures: an experimental investigation
    Farrell, A.M.; Kadous, K.; Towry, K.L.
  • Incentive effects of assigned goals and compensation schemes on budgetary performance
    Fatseas, V.A.; Hirst, M.K.
  • Experimental evidence on the links among monetary incentives, task attractiveness, and task performance
    Fessler, N.J.
  • Size of audit fees and perceptions of auditors’ ability to resist management pressure in audit conflict situations
    Gul, F.A.
  • The effect of task interdependence and type of incentive contract on group performance
    Guymon, R.N.; Balakrishnan, R.; Tubbs, R.M.
  • The power of feedback
    Hattie, J.; Timperley, H.
  • The linear additive and interactive effects of budgetary goal difficulty and feedback on performance
    Hirst, M.K.; Lowy, S.M.
  • Multitask principal-agent analyses: incentive contracts, asset ownership, and job design
    Holmstrom, B.; Milgrom, P.
  • Consequences of individual feedback on behavior in organizations
    Ilgen, D.R.; Fisher, C.D.; Taylor, M.S.
  • Performance evaluation and compensation research: an agency perspective
    Indjejikian, R.J.
  • The performance effects of an ability-based approach to goal assignment
    Jeffrey, S.A.; Schulz, A.; Webb, A.
  • Are financial incentives related to performance? A meta-analytic review of empirical research
    Jenkins, G.D.; Mitra, A.; Gupta, N.; Shaw, J.D.
  • Effects of budgetary goal characteristics on managerial attitudes and performance
    Kenis, I.
  • Audit conflict: an empirical study of the perceived ability of auditors to resist management pressure
    Knapp, M.C.
  • Why incentive plans cannot work
    Kohn, A.
  • The psychological costs of pay-for‐performance: implications for the strategic compensation of employees
    Larkin, I.; Pierce, L.; Gino, F.
  • A review of research on the application of goal setting in organizations
    Latham, G.P.; Yukl, G.A.
  • Effective goal setting: a prerequisite for compensation plans with incentive value
    Liccione, W.J.
  • Toward a theory of task motivation and incentives
    Locke, E.A.
  • Monetary incentives, feedback, and recognition – complements or substitutes? Evidence from a field experiment in a retail services company
    Lourenco, S.M.
  • Feedback and management accounting: a review of research into behavioral consequences
    Luckett, P.F.; Eggleton, I.R.C.
  • Management control systems as a package – opportunities, challenges and research directions
    Malmi, T.; Brown, D.A.
  • A meta-analytic study of the effects of goal setting on task performance: 1966-1984
    Mento, A.J.; Steel, R.P.; Karren, R.J.
  • Joint effects of assigned goal level and incentive structure on task performance: a laboratory study
    Mowen, J.C.; Middlemist, R.D.; Luther, D.
  • The contingency theory of management accounting: achievement and prognosis
    Otley, D.T.
  • Effects of group feedback, goal setting and incentives on organizational productivity
    Pritchard, R.D.; Jones, S.D.; Roth, P.L.; Stuebing, K.K.; Ekeberg, S.E.
  • Performance feedback in organizational behavior management: a review
    Prue, D.M.; Fairbank, J.A.
  • Performance appraisal participation, goal setting and feedback: the influence of supervisory style
    Roberts, G.E.; Reed, T.
  • Management control systems: one view of components and their interdependence
    Rotch, W.
  • The effect of incentive contracts on learning and performance
    Sprinkle, G.B.
  • Perspectives on experimental research in managerial accounting
    Sprinkle, G.B.
  • Productivity-target difficulty, target-based pay, and outside-the-box thinking
    Webb, R.A.; Williamson, M.G.; Zhang, Y.
  • Task complexity as a moderator of goal effects: a meta-analysis
    Wood, R.E.; Mento, A.J.; Locke, E.A.
  • An examination of the relationships among monetary incentives, goal level, goal commitment and performance
    Wright, P.M.
  • Goal setting and monetary incentives: motivational tools that can work too well
    Wright, P.M.
  • Goal specificity as a determinant of goal commitment and goal change
    Wright, P.M.; Kaemar, K.M.