Tell the boss
Fooled by Performance Randomness: Over-Rewarding Luck
Romain Gauriot & Lionel Page
Review of Economics and Statistics, forthcoming
Abstract:
We provide evidence of a violation of the informativeness principle whereby lucky successes are overly rewarded. We isolate a quasi-experimental situation where the success of an agent is as good as random. To do so, we use high quality data on football (soccer) matches and select shots on goal which landed on the goal posts. Using non scoring shots, taken from a similar location on the pitch, as counterfactuals to scoring shots, we estimate the causal effect of a lucky success (goal) on the evaluation of the player’s performance. We find clear evidence that luck is overly influencing managers’ decisions and evaluators’ ratings. Our results suggest that this phenomenon is likely to be widespread in economic organizations.
Mood, Firm Behavior, and Aggregate Economic Outcomes
Vidhi Chhaochharia et al.
Journal of Financial Economics, forthcoming
Abstract:
This study examines whether mood affects the aggregate state-level macroeconomy through its impact on firm-level decisions. Using sky cloud cover as a proxy for mood, we show that mood affects the economic expectations of small business managers. After relatively sunnier periods, managers have more optimistic expectations, and the component of their expectations related to mood influences hiring and investment decisions. Consequently, mood affects state-level job creation and new business starts, especially during periods of greater economic uncertainty. These results suggest that mood-induced economic expectations influence firm-level managerial decisions and state-level macroeconomic fluctuations.
“If hierarchical, then corrupt”: Exploring people’s tendency to associate hierarchy with corruption in organizations
Sean Fath & Aaron Kay
Organizational Behavior and Human Decision Processes, November 2018, Pages 145-164
Abstract:
We propose that people associate organizational hierarchy with corruption. Nine studies (N = 1896) provide triangulating evidence for this tendency and its underlying mechanism. We find that people expect more corruption to manifest among the employees of relatively more hierarchical organizations, and judge an organization with a history of corruption more likely to be hierarchical than one without. Furthermore, we show that the lay belief that hierarchy and corruption are connected is driven by two related assumptions: (i) that the more hierarchical an organization is, the more likely it is that its employees are competitive with each other, and (ii) that the more competitive employees are with each other, the more likely they are to be corrupt. Finally, we connect these lay beliefs to behavioral outcomes involved in trusting people who work for very hierarchical organizations and those organizations themselves. Implications, limitations, and future directions are discussed.
The Voice Bystander Effect: How Information Redundancy Inhibits Employee Voice
Insiya Hussain et al.
Academy of Management Journal, forthcoming
Abstract:
Employees often remain silent rather than speak up to managers with work-related ideas, concerns, and opinions. As a result, managers can remain in the dark about issues that are otherwise well known to, or universally understood by, frontline employees. We propose a previously unexplored explanation for this phenomenon: Voice is prone to bystander effects, such that the more certain information is shared among employees, the less any particular employee feels individually responsible for bringing up that information with managers. We theorize that such bystander effects are especially likely to occur when peers of focal employees, on average, enjoy high quality relationships with managers and thereby have adequate relational access to voice up the hierarchy. Using a correlational study involving managers and employees working in teams in a Fortune 500 company, and two experimental studies (a laboratory study involving undergraduate students working in a hierarchical setting, and a scenario study with a sample of U.S.-based workers), we provide evidence for our conceptual model. We discuss the theoretical and managerial implications of our findings.
Mere listening effect on creativity and the mediating role of psychological safety
Dotan Castro et al.
Psychology of Aesthetics, Creativity, and the Arts, November 2018, Pages 489-502
Abstract:
While research suggests that individuals may increase their own creativity by listening to other’s ideas, the effects of being listened to by others have remained understudied to date. We hypothesized that listening behavior of superiors may positively impact employees to explore new ideas flexibly, leading to higher levels of creativity. We further hypothesized this link to be mediated by psychological safety. Therefore, we developed and tested a mediated model of listening behavior, psychological safety, and creativity at the individual level. In a series of five complementary studies, we found evidence for the hypothesized effects, while excluding alternative explanations such as reversed causality with experimental designs. A meta-analysis of all our studies provided compelling evidence that listening was related to creativity, N = 744, k = 5, r ̄ = .39, 95% CI [.13; .60]. Together, our results suggest that supervisor listening may be an underrated aspect of management that fosters creativity.
Bored by Interest: Intrinsic Motivation in One Task Can Reduce Performance on Other Tasks
Jihae Shin & Adam Grant
Academy of Management Journal, forthcoming
Abstract:
While existing research has demonstrated that intrinsic motivation can increase task performance, jobs are composed of multiple tasks, and it remains to be seen how intrinsic motivation in one task affects performance on other tasks. Drawing on theories of psychological contrast, we hypothesize that high intrinsic motivation in one task reduces performance on less intrinsically motivating tasks. In a field study at a Korean department store, employees with the highest maximum intrinsic motivation in one task had lower average and minimum performance across their other tasks and more performance variance across their tasks. In a laboratory experiment in the U.S., working on a highly intrinsically motivating initial task led participants to perform worse in a subsequent task if it was uninteresting but not if it was interesting. This effect was mediated by boredom but not by a range of other psychological processes. Across both studies, moderate intrinsic motivation in one task was associated with better performance in less interesting tasks than high intrinsic motivation, revealing a curvilinear cross-task effect of intrinsic motivation. Our research advances knowledge about the dark side of intrinsic motivation, the design of work, and the drivers of task performance.
Association between late-night tweeting and next-day game performance among professional basketball players
Jason Jones et al.
Sleep Health, forthcoming
Participants: 112 players from the National Basketball Association.
Measurements: Time-stamped social media activity and in-game individual performance statistics.
Results: Late-night tweeting (compared to not late-night tweeting) is associated with within-person reductions in next-day game performance, including fewer points scored and fewer rebounds. However, we also observe less time played per game following late-night tweets and decreases in the negative outputs of turnovers and personal fouls. The critical measure of shooting accuracy – which is not time dependent – provides the clearest evidence of a performance penalty following late-night tweeting activity (between 11:00 pm and 7:00 am); players successfully make shots at a rate 1.7 percentage points less following late-night tweeting.
Analyzing the Aftermath of a Compensation Reduction
Jason Sandvik et al.
NBER Working Paper, October 2018
Abstract:
Firms rarely cut compensation, so little is known about the after-effects when compensation reductions do occur. We use commission reductions at a sales firm to estimate how work effort and turnover change. In response to an 18% decline in sales commissions, corresponding to a 7% decline in median take-home pay, we find turnover increases for the most productive workers. We detect limited effort responses. Turnover and effort responses do not differ based on workers' survey replies regarding expectations of firm fairness or future promotion. The findings indicate that adverse selection concerns on the extensive margin of retaining workers drive the empirical regularity that firms rarely reduce compensation.
Validation of a matrix reasoning task for mobile devices
Anja Pahor et al.
Behavior Research Methods, forthcoming
Abstract:
Many cognitive tasks have been adapted for tablet-based testing, but tests to assess nonverbal reasoning ability, as measured by matrix-type problems that are suited to repeated testing, have yet to be adapted for and validated on mobile platforms. Drawing on previous research, we developed the University of California Matrix Reasoning Task (UCMRT) — a short, user-friendly measure of abstract problem solving with three alternate forms that works on tablets and other mobile devices and that is targeted at a high-ability population frequently used in the literature (i.e., college students). To test the psychometric properties of UCMRT, a large sample of healthy young adults completed parallel forms of the test, and a subsample also completed Raven’s Advanced Progressive Matrices and a math test; furthermore, we collected college records of academic ability and achievement. These data show that UCMRT is reliable and has adequate convergent and external validity. UCMRT is self-administrable, freely available for researchers, facilitates repeated testing of fluid intelligence, and resolves numerous limitations of existing matrix tests.