Managing It
Scarlet Letters: Rehabilitation Through Transgression Transparency and Personal Narrative Control
Erin Frey, Ethan Bernstein & Nick Rekenthaler
Administrative Science Quarterly, forthcoming
Abstract:
When employees commit transgressions, organizations often use tools of organizational control to prevent them from transgressing again. We investigate whether organizations can use transgression transparency to rehabilitate transgressors. Although making transgressions transparent -- which may result in stigmatization or public shaming -- is generally assumed to be purely punitive, we show when and how it can foster rehabilitation. We draw on a longitudinal, qualitative dataset of 23 similarly situated transgressors at a military academy that added transparency to traditional punishment by requiring transgressors to wear a pin that signaled their transgression. Data from transgressors and from other organizational members revealed that instead of prompting persistent stigmatization, social awareness of the transgression prompted others' inquiry, gradually engaging transgressors in a coactive process to develop a mutually acceptable narrative of their transgression through a mechanism we call personal narrative control. For that personal narrative to endure, transgressors needed to exercise self-control and avoid further transgressions, as they did in our study even after the pin was removed, signaling rehabilitation. We induce four contextual conditions for transgression transparency to trigger personal narrative control and theorize how they might generalize to other organizations seeking to rehabilitate transgressors.
The limits of inconspicuous incentives
Leslie John et al.
Organizational Behavior and Human Decision Processes, September 2022
Abstract:
Managers and policymakers regularly rely on incentives to encourage valued behaviors. While incentives are often successful, there are also notable and surprising examples of their ineffectiveness. Why? We propose a contributing factor may be that they are not sufficiently conspicuous. In a large-scale field experiment (Experiment 1) and three online experiments (Experiments 2-4), we show that even when incentives are transparently provided, failing to make them conspicuous vastly undermines their ability to shift behavior. Online experiments indicate that conspicuous incentives work by increasing people's extrinsic motivation to earn an incentive (Experiment 2) and do not merely serve as reminders to act (Experiment 3). We also assess whether people intuit that incentive conspicuousness matters (Experiment 4); nearly half of participants reject a costless opportunity to make their own incentives conspicuous, which leads them to earn less than they otherwise would. Yet, our results also hint at some degree of sophistication: those who benefit most from making incentives conspicuous are particularly likely to choose to make their incentives conspicuous.
Team Performance: Nature and Antecedents of Nonnormal Distributions
Kyle Bradley & Herman Aguinis
Organization Science, forthcoming
Abstract:
Team research typically assumes that team performance is normally distributed: teams cluster around average performance, performance variability is not substantial, and few teams inhabit the upper range of the distribution. Ironically, although most team research and methodological practices rely on the normality assumption, many theories actually imply nonnormality (e.g., performance spirals, team composition, team learning, punctuated equilibrium). Accordingly, we investigated the nature and antecedents of team performance distributions by relying on 274 performance distributions including 200,825 teams (e.g., sports, politics, firefighters, information technology, customer service) and more than 500,000 workers. First, regarding their overall nature, only 11% of the distributions were normal, star teams are much more prevalent than predicted by normality, the power law with an exponential cutoff is the most dominant distribution among nonnormal distributions (i.e., 73%), and incremental differentiation (i.e., differential performance trajectories across teams) is the best explanation for the emergence of these distributions. Second, this conclusion remained unchanged after examining theory-based boundary conditions (i.e., tournament versus nontournament contexts, performance as aggregation of individual-level performance versus performance as a team-level construct, performance assessed with versus without a hard left-tail zero, and more versus less sample homogeneity). Third, we used the team learning curve literature as a conceptual framework to test hypotheses and found that authority differentiation and lower temporal stability are associated with distributions with larger performance variability (i.e., a greater proportion of star teams). We discuss implications for existing theory, future research directions, and methodological practices (e.g., need to check for nonnormality, Bayesian analysis, outlier management).
Feeling the heat? Fear of failure and performance
Alberto Chong & Marco Chong
Kyklos, forthcoming
Abstract:
We use new individual-level data from MasterChef, a television show in the United States in order to objectively capture situations of fear of failure. We codify situations in which the contestants are on the verge of being eliminated from competition and situations where they explicitly express fear of failing. These new data have the distinct advantage of being purely objective. We cover ten seasons, from 2010 to 2020 and include nearly 200 observations to study the role of fear of failure on performance. Using ordinary least squares, we show that extreme fear of failure is associated with an increase of two to four positions in the final placement of the cooking competition. This positive link between fear of failure and performance tends to contradict the conventional wisdom in both psychology and behavioral economics that such a link tends to be negative. Our findings are robust to broad changes in specification.
Sorting Effects of Broad-Based Equity Compensation
David Tsui & Marshall Vance
Management Science, forthcoming
Abstract:
We examine the sorting role of broad-based equity pay using detailed employee-level data. We propose trust in management as an important characteristic over which equity pay sorts employees, as such pay typically leaves employees with concentrated positions in employer stock and therefore more exposed to the outcomes of management's actions. Consistent with this conjecture, we find that the relation between employees' perceptions of management's credibility and voluntary turnover intentions is significantly stronger in the presence of a broad-based equity plan. Our findings provide insight into how broad-based equity pay can improve firm performance despite theoretical challenges regarding its incentive effects.
Information Frictions and Employee Sorting Between Startups
Kevin Bryan, Mitchell Hoffman & Amir Sariri
NBER Working Paper, September 2022
Abstract:
Would workers apply to better firms if they were more informed about firm quality? Collaborating with 26 science-based startups, we create a custom job board and invite business school alumni to apply. The job board randomizes across applicants to show coarse expert ratings of all startups' science and/or business model quality. Making this information visible strongly reallocates applications toward better firms. This reallocation holds even when restricting to high-quality workers. The treatments operate in part by shifting worker beliefs about firms' right-tail outcomes. Despite these benefits, workers make post-treatment bets indicating highly overoptimistic beliefs about startup success, suggesting a problem of broader informational deficits.
A causal test of the strength of weak ties
Karthik Rajkumar et al.
Science, 16 September 2022, Pages 1304-1310
Abstract:
The authors analyzed data from multiple large-scale randomized experiments on LinkedIn's People You May Know algorithm, which recommends new connections to LinkedIn members, to test the extent to which weak ties increased job mobility in the world's largest professional social network. The experiments randomly varied the prevalence of weak ties in the networks of over 20 million people over a 5-year period, during which 2 billion new ties and 600,000 new jobs were created. The results provided experimental causal evidence supporting the strength of weak ties and suggested three revisions to the theory. First, the strength of weak ties was nonlinear. Statistical analysis found an inverted U-shaped relationship between tie strength and job transmission such that weaker ties increased job transmission but only to a point, after which there were diminishing marginal returns to tie weakness. Second, weak ties measured by interaction intensity and the number of mutual connections displayed varying effects. Moderately weak ties (measured by mutual connections) and the weakest ties (measured by interaction intensity) created the most job mobility. Third, the strength of weak ties varied by industry. Whereas weak ties increased job mobility in more digital industries, strong ties increased job mobility in less digital industries.
Procedure Dependence in Resource Allocations: How Focusing on Resource or Target Affects Variety-Seeking
Leilei Gao & Yan Zhang
Journal of Experimental Psychology: General, forthcoming
Abstract:
Many resource allocation tasks involve the assignment of multiple units of a resource (e.g., money, time, labor) to multiple targets (e.g., stocks, expenditure categories, projects to be carried out). The decision-maker can either focus on the individual targets and decide how many resource units each target should receive (allocation-by-target), or focus on the individual resource units and decide which target each unit should be assigned to (allocation-by-unit). We suggest that the two allocation procedures might result in different outcomes. Specifically, we predict that the allocation-by-unit procedure leads to more variety-seeking than the allocation-by-target procedure. Nine experiments (N = 4,152) provided evidence consistent with this procedure dependence hypothesis. We further demonstrate that the effect occurs because the allocation-by-target procedure encourages people to consider the differences between targets whereas the allocation-by-unit procedure induces people to focus more on each undifferentiated unit. As a result, allocation-by-target, relative to allocation-by-unit, leads to a lower variety-seeking, which manifests as a more concentrated distribution of the resource units across the targets.
New contracts and dismissal threats from highly drafted rookies: What motivates NFL quarterbacks?
Joshua Pitts & Brent Evans
Managerial and Decision Economics, forthcoming
Abstract:
The authors examined whether incumbent starting quarterbacks in the National Football League (NFL) performed better after their teams drafted another quarterback in the first round of the preceding draft. There was some evidence that quarterbacks exhibited slightly improved performance under these conditions. However, the impact on performance was small. There was little evidence of opportunistic behavior by quarterbacks, but quarterbacks may perform slightly better in the first year of a new contract. The authors conclude that quarterbacks are already exerting at or near their maximum effort level and thus their performances are unlikely to be greatly impacted by dismissal threats or contract details.
Place-Based Productivity and Costs in Science
Jonathan Gruber, Simon Johnson & Enrico Moretti
NBER Working Paper, September 2022
Abstract:
Cities with a larger concentration of scientists have been shown to be more productive places for additional scientists to do Research and Development. At the same time, these urban areas tend to be associated with higher costs of doing research, in terms of both wages and land. While the literature on the benefits of agglomeration economies is extensive, it offers no direct evidence of how productivity gains from agglomeration compare with higher costs of production. This paper aims to shed light on the balance between local productivity and local costs in science. Using a novel dataset, we estimate place-based costs of carrying out R&D in each US metro area and assess how these place-based costs vary with the density of scientists in each area. We then compare these costs with estimates of the corresponding productivity benefits of more scientist density from Moretti (2021). Adding more scientists to a city increases both productivity and production costs, but the rise in productivity is larger than the rise in production costs. In particular, each 10% rise in the stock of scientists is associated with a 0.11% rise in costs and a 0.67% rise in productivity. This implies that firms moving from cities with a small agglomeration of scientists to cities with a large agglomeration of scientists experience productivity gains that are 6 times larger than the increase in production costs. This finding is consistent with the increased concentration of R&D activity observed over the past 30 years. However, while the productivity estimate has only modest non-linearities, the cost estimates suggest much larger non-linearities as the concentration of scientists increases. For the most concentrated R&D cities, the difference between productivity gains and cost increases is close to zero.