The Effects of Preventive and Detective Controls on Employee Performance and Motivation

39 Pages Posted: 17 Oct 2009 Last revised: 8 Apr 2011

See all articles by Margaret H. Christ

Margaret H. Christ

University of Georgia - Terry College of Business

Scott A. Emett

Arizona State University (ASU) - School of Accountancy

Scott L. Summers

Brigham Young University - School of Accountancy

David A. Wood

Brigham Young University - School of Accountancy

Date Written: April 6, 2011

Abstract

We examine how two attributes of preventive and detective controls affect employee performance and employee motivation. Specifically, we examine how the extent to which controls (1) restrict employees’ autonomy, and (2) provide more or less timely feedback impacts employees’ performance and intrinsic motivation. These characteristics are the defining differences between preventive and detective controls in that preventive controls restrict employee autonomy relative to detective controls and preventive controls always provide immediate feedback; whereas, detective controls can provide either immediate feedback or delayed feedback. We conduct an experiment to examine how and why these two types of formal controls impact employees’ performance in an incomplete contract setting in which one dimension of the employees’ task is compensated and one dimension is controlled. The results show that detective controls with more timely feedback improve employees’ performance toward the control objective, without affecting their intrinsic motivation. In contrast, the restriction of autonomy associated with preventive controls, has no additional effect on employees’ performance toward the control objective over detective controls with timely feedback but significantly reduces employees’ motivation. Neither control characteristic has a significant effect on employees’ performance on the compensated dimension of the task, suggesting that monetary incentives continue to provide an effective motivation. Our results reveal the importance of designing and implementing controls that provide timely feedback but do not restrict autonomy.

Keywords: Internal Controls, Preventive Controls, Detective Controls, and Intrinsic Motivation

JEL Classification: M40, M41, L86, C91

Suggested Citation

Christ, Margaret H. and Emett, Scott A. and Summers, Scott L. and Wood, David A., The Effects of Preventive and Detective Controls on Employee Performance and Motivation (April 6, 2011). Contemporary Accounting Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1489918

Margaret H. Christ

University of Georgia - Terry College of Business ( email )

Athens, GA 30602-6254
United States
706-542-3602 (Phone)

Scott A. Emett

Arizona State University (ASU) - School of Accountancy ( email )

Tempe, AZ 85287
United States

Scott L. Summers

Brigham Young University - School of Accountancy ( email )

516 TNRB
Provo, UT 84602
United States
801-422-9790 (Phone)
801-422-0621 (Fax)

David A. Wood (Contact Author)

Brigham Young University - School of Accountancy ( email )

518 TNRB
Brigham Young University
Provo, UT 84602
United States
801-422-8642 (Phone)
801-422-0621 (Fax)

HOME PAGE: http://marriottschool.byu.edu/employee/employee.cfm?emp=daw44

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