Research

Abstract: Pay gaps, like gender or racial gaps, violate the widely held belief that employees should receive equal pay for equal work. This study examines whether a common control choice – framing pay raise budgets in percentages – contributes to perpetuating pay gaps. We predict that when the pay raise budget is framed as a percentage (the percentage frame), it inadvertently nudges managers to anchor individual raises on that budget percentage, thereby impounding prior salaries, and thus, existing inequities, into pay raises. We further predict that framing the pay raise budget as an absolute amount (the dollar frame) can un-nudge this behavior. As expected, we find in two experiments that the dollar frame perpetuates pay gaps less than the percentage frame, and that this difference is robust to varying levels of ambiguity about the source of salary differences. Our study examines a simple, cost-effective way to limit the perpetuation of pay gaps. [Link to paper]

Abstract: We examine how the alignment of performance measurement and strategy affects performance on a multidimensional task. Our experiment varies both the strategy (speed versus accuracy) of the hypothetical firm for which participants work and the individual performance measure that is reported to them, creating two conditions of clear alignment and two of clear misalignment. We find that although workers are responsive to the performance measure regardless of its alignment, they are also sensitive to the strategy such that costly alignment effects are observed. We also predict and find that workers respond asymmetrically to misalignment in accuracy performance but not in speed performance, demonstrating that the effects of misaligned performance measurement depend on the fit between firm strategy and the nature of the task being performed. [Link to paper]

Abstract: We investigate the effects of timing and outcome information on the weights managers place on performance measures for performance-based compensation. Collectively from three experiments, we find that when managers are asked to choose which measures will determine employee compensation (i.e., managers determine what measures matter), timing influences how managers navigate the tradeoff between measures’ attributes of congruence and controllability. In contrast, when managers are asked to place weights on a set of given measures that determine employee compensation (i.e., managers determine how much available measures matter), we fail to find evidence of a timing effect and, instead, outcome effects dominate. Ultimately, our study speaks to how managers trade off performance measure attributes and how the unexplored – but fundamental – effect of timing influences this tradeoff, as well as under what circumstances this effect and the more well-established outcome effects prevail.

Abstract: Prior research explores how managers weight measures of performance and potential in job promotion decisions. In this study, I investigate the effect of the labor market on these measure weights. I expect labor market competition to increase the salience of potential employee departures and, consequently, managers’ focus on retention. Drawing on theory of loss aversion, I predict that managers will try to retain high performers by overweighting measures of performance, relative to measures of potential, in job promotion decisions. I also predict that the effect of labor market competition can be mitigated by requiring managers to explicitly, rather than implicitly, weight measures used in promotion decisions. Experimental results support these predictions but highlight additional consequences of using explicit weighting. This study extends prior literature by demonstrating how external labor market conditions can influence internal labor decisions. Ultimately, the findings suggest that labor market competition may increase the likelihood of suboptimal promotion decisions.

Abstract: Companies are increasingly interested in leveraging the unique talents of an underutilized neurodivergent workforce. To do so, they must understand how to engage and motivate neurodivergent employees. To that end, we examine the effectiveness of performance-based contracts in improving autistic employee performance, beyond a fixed pay contract. We predict that piece rate contracts will be less effective for autistic employees than for non-autistic employees. We find support for our prediction in an online experiment; a piece rate contract is less effective at improving, and may reduce, the performance of autistic participants, compared to non-autistic participants. Further analysis suggests that no individual characteristic drives this effect alone.

Abstract: We examine whether framing financial information around employees’ economic contributions increases managers’ investments in employee training. In an online experiment, 271 Prolific participants assume the role of a manager choosing between employee training and an online marketing campaign. We present an identical financial measure as either the economic value of employees’ capabilities (human capital framing) or the economic value of projected gross profit, labeled discounted future gross profit (financial framing). In our initial analyses of the full sample, we find no statistically significant framing effect. Additional analyses, however, suggest that the effect depends on participants’ implicit theory beliefs—the extent to which they view intelligence as fixed or malleable. We detect no significant framing effect among participants with relatively low or high entity beliefs. However, among participants in the middle tercile of implicit theory beliefs, whose views are not strongly incremental or entity-oriented, we find a significant framing effect. Further analysis shows that this group represents what we call “weak incrementalists.” These findings suggest that managers’ beliefs about individual development may condition their responses to human capital measures, highlighting the importance of evaluating when and for whom such measures influence investment decisions.