Research
My research focuses on managerial accounting issues, and I have a particular interest in how group dynamics affect incentive contracting and performance evaluation within organizations. I specialize in experimental research using theories from psychology and economics to investigate my research questions.
Working Papers
How Do Reference Group Size and Relative Performance Incentives Affect Employee Performance? (Dissertation)
Committee: Geoff Sprinkle & Lori Bhaskar (co-chairs), Jason Brown, Joe Burke, and Ed Hirt
Selected for presentation at the 2023 JMAR Rookie Camp
Abstract: Relative performance evaluations compare an employee’s performance to the performance of a relevant reference group. I conduct a laboratory experiment to examine how the size of an employee’s reference group and the presence of relative performance incentives affect their performance under relative performance evaluation. I predict that relative performance incentives will increase employee performance relative to a fixed wage. I also predict that the effect of reference group size will depend on the incentive such that an increase in reference group size will increase performance for employees working under a relative performance incentive but will decrease performance for employees working under a fixed wage. I find that relative performance incentives increase performance in small groups but have no effect on performance in large groups. Furthermore, I find that increasing reference group size increases performance for employees working under both the relative performance incentive and the fixed wage. In contrast to a large literature that details the disadvantages of large groups, these findings provide novel evidence of a significant benefit of increasing group size. Overall, my study has implications for how managers incentivize and organize their relative performance evaluations.
How Do Group Size and Group Relative Performance Information Affect Managerial Reporting?
Co-authors: Lori Bhaskar, Indiana University; Geoff Sprinkle, Indiana University; Dan Way, Villanova University
Outstanding Paper Award winner - 2023 AAA Management Accounting Section Midyear Meeting
Abstract: We conduct a laboratory experiment to examine how two important organizational design choices—the size of the group and the provision of group relative performance information (RPI)—affect managers’ reporting honesty. Consistent with our theory and predictions, we find that managers report less honestly in large groups than in small groups, and that honesty decreases over time in both small and large groups. Also consistent with expectations, we find that group RPI mitigates decreases in honesty to a greater extent for small groups than for large groups. Moreover, group RPI appears to exacerbate the decrease in honesty over time in large groups. Collectively, our study has implications for an organization’s architecture and how performance is measured, as well as for the efficacy of providing group RPI.
Productivity versus Efficiency: The Effect of Incentive Frame on Target Setting in Participative Budgets
Co-authors: Jake Andrassy, Indiana University; Jason Brown, Indiana University; Ashley Sauciuc, Indiana University
Abstract: We examine how incentive frame and outcome uncertainty affect the degree of risk-reducing slack that employees build into their budget-based performance targets. We predict and find that employees perceive an efficiency contract that rewards input minimization as riskier than an equivalent productivity contract that rewards output maximization, and that this heightened risk perception leads to greater risk-reducing budgetary slack in their performance targets. We further predict that outcome uncertainty increases risk-reducing budgetary slack, and that the effect of incentive framing is stronger under higher uncertainty. Consistent with expectations we find that outcome uncertainty leads to greater slack under both incentive frames, but the effect is symmetric across the two contracts with no significant interaction. Our findings have implications for organizations that use budget-based incentives and participative budgeting systems as utilizing productivity incentives instead efficiency incentives may lead to lower levels of budgetary slack and higher performance targets.
Works in Process
The Effects of Employee Charitable Giving and Employee Contribution Information on Workplace Cooperation
Co-authors: Eric Chan, University of Texas at Austin; Kyle Mao, Texas State University
Experimental design stage
The Effects of Profit- vs. Purpose-driven Decision Frames and Project Stage on Manager Risk-taking
Co-authors: Billy Brewster, Texas State University; Mandy Ellison, Texas State University; Kyle Mao, Texas State University
Theory development stage