Managerial intentions for and employee perceptions of group-based incentives : Social exchange theory-based interpretations
Journal of Accounting & Organizational Change
ISSN: 1832-5912
Article publication date: 22 November 2019
Issue publication date: 22 November 2019
Abstract
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.
Keywords
Citation
Moilanen, S. and Ikäheimo, S. (2019), "Managerial intentions for and employee perceptions of group-based incentives : Social exchange theory-based interpretations", Journal of Accounting & Organizational Change, Vol. 15 No. 4, pp. 605-625. https://doi.org/10.1108/JAOC-04-2019-0043
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited