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

40 Pages Posted: 14 Sep 2020 Last revised: 12 Oct 2021

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 12, 2021

Abstract

Prior research has found that narcissistic managers promote unethical and counterproductive employee behaviors in the workplace. We examine how this effect depends upon the framing of the manager’s incentive scheme. In an experiment with 356 employees, we manipulate the description of the manager narcissism (high or low) and the framing of manager’s compensation scheme (bonus or penalty) and examine the joint effect of these two factors on employee effort to help the manager reach her or his objectives. Results show that employees invest less (more) effort when manager narcissism is high (low). Importantly, we also find that a 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 12, 2021). 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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