The interactive effects of manager narcissism and the framing of the manager’s incentive scheme on employee effort

Advances in Management Accounting

Posted: 14 Sep 2020 Last revised: 7 Dec 2023

See all articles by Miriam Maske

Miriam Maske

University of the German Federal Armed Forces - Universität der Bundeswehr München

Matthias Sohn

European University Viadrina Frankfurt (Oder)

Bernhard Hirsch

Bundeswehr University Munich

Date Written: October 6, 2023

Abstract

This paper studies how employee effort depends upon the superior manager’s level of narcissism and the framing of the manager’s incentive scheme. In an online experiment with 356 employee participants, we manipulate the description of the manager narcissism (high or low) and the framing of the manager’s compensation scheme (bonus or penalty) and examine the joint effect of these two factors on employee effort to help the manager reach their objectives. Results show that employees exert less (more) effort when manager narcissism is high (low). This effect is mediated by employees’ feelings of envy towards the superior. In line with recent research on the cascading effect of management compensation, we also find that a manager’s penalty contract has a negative effect on employee effort when manager narcissism is high. Our results have important implications for compensation design in business practice.

Keywords: narcissism, contract frame, cascading controls

JEL Classification: M41, M52

Suggested Citation

Maske, Miriam and Sohn, Matthias and Hirsch, Bernhard, The interactive effects of manager narcissism and the framing of the manager’s incentive scheme on employee effort (October 6, 2023). Advances in Management Accounting, Available at SSRN: https://ssrn.com/abstract=3685805 or http://dx.doi.org/10.2139/ssrn.3685805

Miriam Maske

University of the German Federal Armed Forces - Universität der Bundeswehr München ( email )

Werner-Heisenberg-Weg 39
Neubiberg
Munich, 85579
Germany

Matthias Sohn (Contact Author)

European University Viadrina Frankfurt (Oder) ( email )

Grosse Scharrnstr. 59
Frankfurt (Oder), Brandenburg 15230
Germany

Bernhard Hirsch

Bundeswehr University Munich ( email )

Werner-Heisenberg-Weg 39
Neubiberg, 85577
Germany

HOME PAGE: http://www.unibw.de

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