How to manage
It’s about time: Divergent evaluations of restrictive policies in the near and distant future
Nathaniel Nakashima, David Daniels & Kristin Laurin
Organizational Behavior and Human Decision Processes, September 2017, Pages 12–27
When should leaders announce policies that create net benefits for organizations, but also restrict individual member choices? We find that restrictive policies engender more support from stakeholders when they are to be implemented in the distant versus near future (Studies 1 and 2). We find similar results when manipulating construal level instead of temporal distance (Study 3). The effect of temporal distance on attitudes toward a policy is mediated by people’s attention to different aspects of the policy (desirability vs. feasibility, pros vs. cons, self vs. other) (Study 4). Furthermore, temporal distance enhances support for policies that are high, but not low, in desirability for the collective (Study 5). The evidence is consistent with Construal Level Theory; we also consider Rational Choice Theory as an alternative perspective. Our findings suggest that leaders who wish to maximize member support for restrictive policies should consider announcing them well in advance of their implementation date.
More Is Less: Learning But Not Relaxing Buffers Deviance Under Job Stressors
Chen Zhang, David Mayer & Eunbit Hwang
Journal of Applied Psychology, forthcoming
Workplace deviance harms the well-being of an organization and its members. Unfortunately, theory and prior research suggest that deviance is associated with job stressors, which are endemic to work organizations and often cannot be easily eliminated. To address this conundrum, we explore actions individuals can take at work that serve as buffering conditions for the positive relationship between job stressors and deviant behavior. Drawing upon conservation of resources theory, we examine a resource-building activity (i.e., learning something new at work) and a demand-shielding activity (i.e., taking time for relaxation at work) as potential boundary conditions. In 2 studies with employee samples using complementary designs, we find support for the buffering role of learning but not for relaxation. When employees learn new things at work, the relationship between hindrance stressors and deviance is weaker; as is the indirect relationship mediated by negative emotions. Taking time for relaxation at work did not show a moderating role in either study. Therefore, although relaxation is a response that individuals might be inclined to turn to for counteracting work stress, our findings suggest that, when it comes to addressing negative emotions and deviance in stressful work environments, building positive resources by learning something new at work could be more useful. In that way, doing more (i.e., learning, and not relaxing) is associated with less (deviance) in the face of job stressors.
The benefits of not seeing eye to eye with leadership: Divergence in risk preferences impacts multiteam system behavior and performance
Klodiana Lanaj, Trevor Foulk & John Hollenbeck
Academy of Management Journal, forthcoming
Multiteam systems are large structures of interdependent teams that coordinate via planning before embarking on important projects. Although rarely studied, theory suggests that expression of convergent versus divergent goals and preferences during planning by leadership and component teams matters for multiteam system performance. Addressing this important issue, in a sample of multiteam systems consisting of Air Force officers, we examine how convergent versus divergent preferences for risk expressed during planning by the leadership and component teams impact multiteam system behavior and performance during the performance episode. Drawing from literatures on multiteam systems, diversity, and risk we posit and show that divergent (vs. convergent) preferences for risk have positive implications for multiteam system behavior and performance. Specifically, when the leadership and component teams hold divergent risk preferences, multiteam systems engage in more aspirational behavior and perform better. Alternatively, when the leadership and component teams hold convergent risk preferences, multiteam systems perform worse, partially because they display lower aspirational behavior. Consistent with a learning perspective, the beneficial effects of divergent preferences for risk increase over time. We discuss the implications of our findings for research and practice.
All About Balance? A Test of the Jack-of-all-Trades Theory Using Military Enlistment Data
Lina Aldén, Mats Hammarstedt & Emma Neuman
Labour Economics, December 2017, Pages 1-13
According to the Jack-of-all-trades theory, people with a balanced set of skills are more suitable for self-employment than are those without. In this paper we test this theory using Swedish Military Enlistment data. This data enables us to construct a measure of balance in abilities that, in comparison to measures used in previous research, is less contaminated by endogeneity problems. We find clear support for the Jack-of-all-trades theory, in the sense that the likelihood of being self-employed is higher for individuals whose skills are balanced. In addition, their earnings from self-employment tend to be higher.
Turning up by Turning Over: The Change of Scenery Effect in Major League Baseball
Bryan Rogers et al.
Journal of Business and Psychology, October 2017, Pages 547–560
Design/Methodology/Approach: This study uses publicly available MLB performance data from 2004 to 2015. The data comprise 712 team changes for players following two consecutive years with the same organization. Data were analyzed using MANCOVA to assess the impact of changing teams on player performance.
Findings: Results indicate players with declining performance benefited significantly from a change of scenery. Following a team change, these players experienced a significant increase in their performance that remained stable through a subsequent season. The effect was not different for players who changed teams via trade and free agency and was modest for those returning to a past organization. Analysis also showed that players leaving while their performance was improving suffered a subsequent performance drop-off in the new organization.
Gift Exchange in the Workplace: Addressing the Conflicting Evidence with a Careful Test
Management Science, forthcoming
Tests of gift exchange, wherein agents receive excess wages which are noncontingent on performance in one-shot settings, have yielded contradictory evidence: they sometimes find effort boosts, consistent with gift exchange, whereas they sometimes find no effort increases, consistent with a standard model. We identify eight confounds that could have led to the mixed evidence — agent disutility from being viewed as selfish, small samples, insufficient wage raises, an effort ceiling, fatigue, selection of abler workers, reemployment concerns, and peer effects — and run a comprehensive test addressing them. Our test consisted of a field experiment hiring workers for a data entry job, followed by laboratory games assessing their prosocial behavior. After addressing these confounds, we find that behavior during the field test was consistent with a standard model: workers did not repay fixed wage raises with an effort boost, but they did raise effort in response to a piece rate. The piece-rate scheme was also more efficient: the effort boost came at lower expense than paying fixed wage raises. Further, workers who behaved prosocially in laboratory games did not behave prosocially in the field.
Duality in Diversity: Cultural Heterogeneity, Language, and Firm Performance
Matthew Corritore, Amir Goldberg & Sameer Srivastava
Stanford Working Paper, July 2017
This article deepens our understanding of how the culture of an organization can reflect its underlying capacity for execution and creative exploration and thereby foreshadow how it will perform in the future. Existing literature often understands cultural diversity as presenting a trade-off between task coordination and creative problem-solving. In contrast, we conceptually unpack cultural heterogeneity into two distinct forms: compositional and content-based. We propose that the former undermines coordination and therefore portends worsening firm profitability, while the latter facilitates creativity and therefore predicts higher market expectations of future growth. To evaluate these propositions, we use unsupervised learning to identify cultural content in employee reviews of nearly 500 publicly traded firms on the Glassdoor website and then develop novel, time-varying measures of cultural heterogeneity. Using coarsened exact matching to reduce imbalance between firms exhibiting higher and lower levels of compositional and content-based heterogeneity, we find support for our two core propositions.
Does March Madness Lead to Irrational Exuberance in the NBA Draft? High-Value Employee Selection Decisions and Decision-Making Bias
Casey Ichniowski & Anne Preston
Journal of Economic Behavior & Organization, October 2017, Pages 105-119
We use detailed, personally-assembled data on the performance of collegiate and professional basketball players over the 1997-2010 period, to look at the impact of performance in the NCAA “March Madness” college basketball tournament on NBA teams’ draft decisions and players’ ultimate success in the NBA. We find that unexpected March Madness (MM) performance, in terms of team wins and player scoring, affects draft decisions, and NBA personnel who are making these draft decisions are not irrationally overweighting this MM information. If anything, the unexpected performance in the March Madness tournament deserves more weight than it gets in the draft decisions.
Wisdom of the Employee Crowd: Employer Reviews and Stock Returns
Clifton Green et al.
Emory University Working Paper, July 2017
We find that firms experiencing improvements in crowd-sourced employer ratings significantly outperform firms with declines. The return effect is concentrated among reviews from current employees, and it is stronger among early firm reviews and when the employee works in the headquarters state. Decomposing employer ratings, we find the return effect is related to changing employee assessments of career opportunities and views of senior management and unrelated to work-life balance. Changing employer reviews predict contemporaneous growth in sales and profitability and help forecast one-quarter ahead earnings announcement surprises. The evidence is consistent with employee reviews revealing fundamental information about the firm.
Are Bonus Pools Driven by Their Incentive Effects? Evidence from Fluctuations in Gainsharing Incentives
Alan Benson & Sima Sajjadiani
ILR Review, forthcoming
Bonus pools, in which a worker’s realized bonus depends both on a worker’s share of the pool (which serves as the incentive) and on the size of the pool (which is largely outside of the worker’s control), are a common method for distributing incentive pay. Using data on the variation in the size of the bonus pool generated by a US manufacturing plant’s gainsharing plan, which varies incentives for quality and worker engagement, the authors evaluate the conditions under which such bonuses have incentive effects. Overall, results are cautionary: The evidence suggests gainsharing’s benefits operate outside of the incentive channel, and incentives may backfire if they are too small or too diluted by group performance metrics. The authors illustrate how random variation in the size of bonus pools offers researchers a powerful, readily available, and underused tool for studying how workers respond to the availability and strength of incentives.