The Effects of Incentive Subjectivity and Strategy Communication on Knowledge-Sharing and Extra-Role Behaviours

Posted: 2 Jul 2013

See all articles by Mandy M. Cheng

Mandy M. Cheng

UNSW Australia Business School, School of Accounting

Rodney Coyte

University of Sydney Business School

Date Written: July 1, 2013

Abstract

This study examines the effects of performance measurement system design on employees’ willingness to share knowledge and their general tendency to pursue extra-role behaviours. Two key design issues are examined, namely, incentive scheme subjectivity and communicating the value of human-based intangible assets through a strategy map. Using a controlled experiment we found that employees are more willing to share knowledge with a co-worker (even if it means diverting resources away from incentivised areas) under a subjective weighting scheme than a formula-based scheme. In addition, we found an interaction effect where the communication of the strategic value of human-based intangible assets increases employees’ general tendency to pursue extra-role behaviours under a subjective weighting scheme, but decreases this tendency under a formula-based scheme. Our study contributes to the performance management literature and has implications for practice by providing empirical evidence demonstrating how the design of performance measurement systems can motivate discretionary behaviours in relation to performance areas that are not recognised by the formal incentive scheme.

Keywords: extra-role behaviours, knowledge sharing, incentive scheme, performance management systems

JEL Classification: M4

Suggested Citation

Cheng, Mandy M. and Coyte, Rodney W, The Effects of Incentive Subjectivity and Strategy Communication on Knowledge-Sharing and Extra-Role Behaviours (July 1, 2013). Management Accounting Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2288186

Mandy M. Cheng (Contact Author)

UNSW Australia Business School, School of Accounting ( email )

Sydney, NSW 2052
Australia
(612) 9385.6343 (Phone)

Rodney W Coyte

University of Sydney Business School ( email )

University of Sydney Business School CBD Campus
Level 17, 133 Castlereagh Street
Sydney, NSW 2000
Australia
+61 2 9351 8615 (Phone)
+61 2 9351 6638 (Fax)

HOME PAGE: http://sydney.edu.au

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