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You Promoted Who? Managers’ Strategic Promotion Decisions and the Effects of Transparency and Compensation Interdependence

Published on: 07-Nov-2017
15-Nov-2017 1330hrs - 1500hrs
VENUE: Executive Seminar Room 5 (S3.1-B1-07), Nanyang Business School, Nanyang Technological University
Contact Information:

Adeline Tang <amytang@ntu.edu.sg>


Using a laboratory experiment, we investigate managers’ tendency to strategically influence performance evaluations that affect promotion decisions. One important distinction between performance evaluations that inform promotion decisions and evaluations that are only used to allocate tangible rewards is that employees who earn a promotion will leave the manager’s unit, such that their effort and skill will no longer benefit the manager.

​Victor S MAAS
Professor
University of Amsterdam
 
 
Chairperson:
Asst Professor Huaxiang YIN
 
 
Wednesday, 15 November 2017
1.30 pm to 3.00 pm
Executive Seminar Room 5 (S3.1-B1-07)
 
 
Abstract
Using a laboratory experiment, we investigate managers’ tendency to strategically influence performance evaluations that affect promotion decisions. One important distinction between performance evaluations that inform promotion decisions and evaluations that are only used to allocate tangible rewards is that employees who earn a promotion will leave the manager’s unit, such that their effort and skill will no longer benefit the manager. We propose that managers may therefore sometimes act strategically in promotion decisions, and provide biased recommendations, increasing the probability that low performing employees are promoted up and out of their unit, and decreasing the probability that excellent employees are promoted. We develop theory about how two crucial design variables of the organization’s control system, transparency about individual performance levels and interdependence of employees’ compensation, affect managers tendency to strategically influence promotion decisions. Data from a laboratory experiment confirm that managers strategically influence promotion decisions, and that the extent to which they engage in such behavior depends on transparency about individual performance levels and compensation interdependence.
 
About the Speaker
Victor Maas is Professor of Accounting and currently the Head of the Business School at the University of Amsterdam. Professor Maas earned his PhD at the University of Amsterdam in 2007. He teaches courses in financial accounting and management accounting in undergraduate, graduate, and executive programs. In his research, he investigates how economic incentives, cognitive processes and social dynamics affect the way in which individuals produce and use accounting information. He has published in journals such as The Accounting Review, Journal of Accounting Research, Accounting Organizations & Society, Behavioral Research in Accounting, European Accounting Review, Management Accounting Research, Accounting and Business Research, British Journal of Management and the Journal of Business Ethics.
 
Venue Website: http://maps.ntu.edu.sg/maps#q:executive%20seminar%20rooms
 
For further information and enquiries, please contact Adeline Tang at amytang@ntu.edu.sg.
 
Nanyang Business School, Nanyang Technological University, Block S3, 50 Nanyang Avenue, Singapore 639798 www.ntu.edu.sg

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