Ethics Versus Outcomes: Managerial Responses to Incentive-Driven and Goal-Induced Employee Behavior

48 Pages Posted: 9 Sep 2017

See all articles by Gary Fleischman

Gary Fleischman

Texas Tech University

Eric N. Johnson

University of Wyoming

Sean Valentine

University of North Dakota - College of Business & Public Administration

Kenton Walker

University of Memphis

Date Written: September 4, 2017

Abstract

Management plays an important role in setting the ethical tone in organizations. To support this aim, managers must use incentive and goal programs in ethical ways. This study examines experimentally the potential ethical costs associated with incentive-driven and goal-induced employee behavior from a managerial perspective. In a quasi-experimental setting, 243 MBA students with significant professional work experience evaluated a hypothetical employee’s ethical behavior under incentive pay systems modeled on a business case. In the role of the employee’s manager, participants evaluated the ethicality of the employee’s incentive-driven and goal-induced ethical or unethical behavior and the outcomes of the behavior, with consequences that were either favorable or unfavorable to the organization. The results indicated that participants discounted the ethical considerations of incentive-driven and goal-induced behavior when consequences were favorable to the organization. Participants’ morals and outcome orientations were also significantly related to their ethical judgments and intentions to intervene. The implications of these findings for research and practice are discussed.

Keywords: management, organizational ethics, incentives, goals, behavior, deontology, teleology

JEL Classification: M12

Suggested Citation

Fleischman, Gary and Johnson, Eric N. and Valentine, Sean and Walker, Kenton, Ethics Versus Outcomes: Managerial Responses to Incentive-Driven and Goal-Induced Employee Behavior (September 4, 2017). Journal of Business Ethics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3032078

Gary Fleischman (Contact Author)

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

Eric N. Johnson

University of Wyoming ( email )

Department of Accounting and Finance
College of Business
Laramie, WY 82071
United States

HOME PAGE: http://www.uwyo.edu/accounting/accounting-faculty-and-staff-directory/Eric%20Johnson.html

Sean Valentine

University of North Dakota - College of Business & Public Administration ( email )

Grand Forks, ND 58105
United States

Kenton Walker

University of Memphis ( email )

Memphis, TN 38152
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
32
Abstract Views
788
PlumX Metrics