Vincent K. Chong and Maggie B.C. Law
This study aims to examine the role of trust-in-supervisor and organizational commitment on the relationship between a budget-based incentive compensation scheme and job…
Abstract
Purpose
This study aims to examine the role of trust-in-supervisor and organizational commitment on the relationship between a budget-based incentive compensation scheme and job performance.
Design/methodology/approach
A survey was conducted involving 120 managers from Australian manufacturing firms listed in the Who’s Who in Business in Australia electronic database. A partial least squares approach was used to assess the psychometric properties of the theoretical model and proposed hypotheses. Data analysis was conducted using WarpPLS Version 5.0.
Findings
The results suggest that the reliance on a high budget-based incentive compensation scheme was found to lead to higher trust-in supervisor, which in turn resulted in higher organizational commitment and improved subordinate job performance.
Research limitations/implications
This study is subject to the limitations of survey-based research.
Practical implications
This study may assist top management to better understand the importance of designing an effective budget-based incentive compensation scheme to promote high interpersonal trust and organizational commitment among subordinates. Cultivating a climate of trust may help to enhance interpersonal trust between subordinates and their superior, which in turn may lead to higher levels of organizational commitment and improvement in subordinate job performance.
Originality/value
This paper elucidates and contributes to the existing literature by suggesting that a budget-based incentive compensation scheme can directly affect subordinates’ level of trust in their supervisor, and that trust-in-supervisor can serve as an antecedent to the development and cultivation of subordinates’ commitment to the organization, which in turn improves their job performance.
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Vincent Chong and Simon Tak-wing Leung
The purpose of this paper is to examine the joint effects of performance feedback, assigned goal levels and types of compensation schemes (i.e. fixed-pay, piece-rate and goal…
Abstract
Purpose
The purpose of this paper is to examine the joint effects of performance feedback, assigned goal levels and types of compensation schemes (i.e. fixed-pay, piece-rate and goal attainment bonus) on subordinates’ task performance.
Design/methodology/approach
A laboratory experiment was employed to collect data. The subjects consisted of a total of 133 Australian business executives. The study used ANCOVA for data analyses, controlling subject’s practice trial scores as covariate.
Findings
The results provide strong support for a three-way interaction between performance feedback, assigned goal levels and types of compensation schemes on subordinates’ task performance. Specifically, the results reveal that the reliance of a piece-rate compensation scheme resulted in higher task performance when compared to fixed-pay and goal attainment bonus compensation schemes in the presence of performance feedback and assigned difficult goal levels situations. In addition, the results reveal that a goal attainment bonus compensation scheme leads to higher task performance when compared to a fixed-pay compensation scheme in the presence of performance feedback and assigned difficult goal levels situations.
Originality/value
These findings have important implications for compensation schemes design in firms that aim to achieve higher employees’ performance and organizational effectiveness.
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Muhammad Irdam Ferdiansah, Vincent K. Chong, Isabel Z. Wang and David R. Woodliff
This paper aims to investigate the mediating role of moral justification in the relationship between stretch goals and counterproductive work behavior (CWB).
Abstract
Purpose
This paper aims to investigate the mediating role of moral justification in the relationship between stretch goals and counterproductive work behavior (CWB).
Design/methodology/approach
A sample of 149 US-based middle-level managers drawn from an online survey relying on Qualtrics was used for this study.
Findings
The results show that the level of stretch goals is positively related to CWB. Furthermore, the results show that moral justification partially mediates this relationship. The results suggest that when a goal is set at low or medium levels, stretch goals are not related to CWB.
Research limitations/implications
The result has managerial implications suggesting that the senior management should avoid setting the level of stretch goals that employees would perceive as high because a high level of stretch goals could suggest extremely challenging but unattainable goals, resulting in employees engaging in CWB.
Originality/value
The “bright side” of stretch goals can enhance organizational performance however the “dark side” of stretch goals can backfire and undermine organizational performance. This paper examines the “dark side” of stretch goals that show that when employees perceive goals set are extremely challenging but unattainable, such perception of high-performance goals would induce employees’ desire to engage in CWB, especially when they could morally justify (rationalize) such behavior.
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Vincent Chong and Kar Ming Chong
This study examines the moderating effect of feedback on the relationship between budgetary participation and performance. The responses of 79 managers, drawn from a cross‐section…
Abstract
This study examines the moderating effect of feedback on the relationship between budgetary participation and performance. The responses of 79 managers, drawn from a cross‐section of Australian manufacturing companies, to a questionnaire survey were analysed using a multiple regression technique. The results show that independently, budgetary participation and feedback have no effect on performance. The results confirm that the higher the level of feedback, the more positive is the relationship between budgetary participation and performance.
This paper examines the effect of job‐relevant information on the relationship between management accounting systems (MAS) and task uncertainty affecting managerial performance…
Abstract
This paper examines the effect of job‐relevant information on the relationship between management accounting systems (MAS) and task uncertainty affecting managerial performance. Data are obtained via survey questionnaire of a sample of 131 senior managers from manufacturing firms in Australia. The study finds a statistically significant three‐way interaction between the extent of use of broad scope MAS information, job‐relevant information and task uncertainty affecting managerial performance. More specifically, the results suggest that under low task uncertainty situations, the use of more broad scope MAS information, regardless of job‐relevant information, would potentially result in information overload, which is detrimental to managerial performance. On the other hand, the results suggest that under high task uncertainty situations, the use of more broad scope MAS information and high use of job‐relevant information for decision‐making leads to improved managerial performance.
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Vincent K. Chong and Simon Leung Tak‐Wing
This study adopts a goal setting theory as the theoretical framework for studying the motivational effect of budgetary participation on job performance. This study proposes that…
Abstract
This study adopts a goal setting theory as the theoretical framework for studying the motivational effect of budgetary participation on job performance. This study proposes that budgetary participation affects job performance via two intervening variables, namely budget goal difficulty and budget goal commitment. The results show that budgetary participation enhances job performance directly and indirectly via budget goal difficulty and budget goal commitment.
Vincent K. Chong, Isabel Z. Wang and Gary S. Monroe
This study examines the effect of delegation of decision rights, moral justification (MJ), and ethical climate (EC) on managers’ misreporting in the financial services sector. We…
Abstract
This study examines the effect of delegation of decision rights, moral justification (MJ), and ethical climate (EC) on managers’ misreporting in the financial services sector. We employed an online research panel called Qualtrics, to collect data based on a sample of 127 middle-level managers from various US financial services firms. We find that MJ mediates the relation between delegation and misreporting, suggesting delegation of decision rights increases employees’ misreporting indirectly by increasing MJ. We also find that EC significantly moderates the relationship between MJ and misreporting. Furthermore, our test of the moderated-mediation effect reveals that the indirect effect of the delegation of decision rights on misreporting through MJ is stronger when there is a higher level of instrumental climate (IC) and a lower level of principle climate (PC).
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Vincent K. Chong and Nurul Farhana Khudzir
This chapter examines the effect of mutual monitoring and the personality trait of need for achievement on subordinates’ budgetary-slack creation in a team-based environment…
Abstract
This chapter examines the effect of mutual monitoring and the personality trait of need for achievement on subordinates’ budgetary-slack creation in a team-based environment. Experimental results show that the creation of budgetary slack is lower when mutual monitoring is present than when it is absent. The results also show that a two-way interaction between mutual monitoring and the personality trait of need for achievement affects subordinates’ budgetary-slack creation.
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Vincent K. Chong, Michele K. C. Leong and David R. Woodliff
This paper uses a laboratory experiment to examine the effect of accountability pressure as a monitoring control tool to mitigate subordinates' propensity to create budgetary…
Abstract
This paper uses a laboratory experiment to examine the effect of accountability pressure as a monitoring control tool to mitigate subordinates' propensity to create budgetary slack. The results suggest that budgetary slack is (lowest) highest when accountability pressure is (present) absent under a private information situation. The results further reveal that accountability pressure is positively associated with subordinates' perceived levels of honesty, which in turn is negatively associated with budgetary slack creation. The findings of this paper have important theoretical and practical implications for budgetary control systems design.
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Vincent K. Chong, Ian R.C. Eggleton and Michele K.C. Leong
This chapter examines the effects of the value attainment and cognitive roles of budgetary participation on job performance. A structural model consisting of variables such as…
Abstract
This chapter examines the effects of the value attainment and cognitive roles of budgetary participation on job performance. A structural model consisting of variables such as budgetary participation, job-relevant information, job satisfaction, and job performance is proposed and tested using a survey questionnaire on 70 senior managers, drawn from a cross-section of the financial services sector. Their responses are analyzed using a structural equation modeling (SEM) technique. The results reveal that budgetary participation is positively associated with job-relevant information. These results lend support to the cognitive effect of budgetary participation, which suggests that subordinates participate in the budget setting process to share information. In addition, the results suggest that budgetary participation is positively associated with job satisfaction. These results support the value attainment role of budgetary participation, which increases subordinates’ levels of job satisfaction. Furthermore, the results reveal that there are positive relationships between job-relevant information and job satisfaction, job-relevant information and job performance, and job satisfaction and job performance.