Compensation or Feedback: Motivating Performance in Multidimensional Tasks

51 Pages Posted: 16 Aug 2011 Last revised: 7 Aug 2015

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

William B. Tayler

Brigham Young University

David A. Wood

Brigham Young University - School of Accountancy

Date Written: July 2015

Abstract

Employees often perform tasks with multiple dimensions. In this study, we examine how employees’ performance on multidimensional tasks differs under different control structures. We conduct two experiments in which we manipulate the presence of compensation controls and the presence of feedback controls on multiple task dimensions. Our findings suggest that when employees are compensated on multiple dimensions they commit to multiple goals and divide their attention among those task dimensions. However, when feedback controls are implemented on one task dimension with compensation controls on another dimension, employees can improve performance on individual dimensions as well as their overall task performance. As a result, we find that employee performance on a multidimensional task can be higher when firms compensate employees on one task dimension and provide feedback on the other task dimension than when firms compensate on both task dimensions. This study highlights the benefits of complementing compensation-based controls (i.e., incentive pay) with non-compensation based controls (e.g., feedback), and provides a theoretical basis to help explain the prevalence of this approach in practice.

Keywords: Internal Control, Incentives, Compensation, Multidimensional Tasks

JEL Classification: M40, M41, M49, M52

Suggested Citation

Christ, Margaret H. and Emett, Scott A. and Tayler, William B. and Wood, David A., Compensation or Feedback: Motivating Performance in Multidimensional Tasks (July 2015). Available at SSRN: https://ssrn.com/abstract=1910347 or http://dx.doi.org/10.2139/ssrn.1910347

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

William B. Tayler (Contact Author)

Brigham Young University ( email )

Brigham Young University
519 TNRB
Provo, UT 84602
United States
(801) 422-5972 (Phone)
(801) 422-0621 (Fax)

David A. Wood

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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