Can second-chance provisions increase the effectiveness of penalty contracts? Evidence from a quasi field experiment

• 成果类型: Article
• 署名作者: Chen, Clara Xiaoling; Wang, Laura W.; Wu, Anne; Wu, Steve Yuching
• 署名单位: University of Illinois System; University of Illinois Urbana-Champaign; National Chengchi University; Western University (University of Western Ontario)
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12961
• 发表日期: 2024
• 页码: 1672-1694
• 关键词: ORGANIZATIONAL JUSTICE; fairness; attribution; CITIZENSHIP; incentives; success; LEVEL

摘要

Penalty contracts are commonly utilized in developing countries. Such contracts may be perceived as unfair, potentially reducing employee motivation and performance. We predict that adding a second-chance provision, an opportunity to reverse a penalty for poor performance if subsequent performance improves, could improve the effectiveness of penalty contracts. In a quasi field experiment at a company with two manufacturing facilities in Taiwan, we treated one facility with a traditional-penalty contract without a second-chance provision and the other with a penalty contract with a second-chance provision. We observe a significant difference in the two treatment effects, with employee performance decreasing significantly after the traditional-penalty treatment but showing no decrease when a second-chance provision was included. Further analysis reveals that this difference is mediated by employees' fairness perceptions. These results provide valuable insights to governments, nongovernmental organizations, and multinationals as they work together to improve the fairness of global compensation practices. Les dispositions de deuxi & egrave;me chance accroissent-elles l'efficacit & eacute; des contrats de p & eacute;nalit & eacute;? Donn & eacute;es probantes issues d'une quasi-exp & eacute;rience sur le terrainLes contrats de p & eacute;nalit & eacute; sont fr & eacute;quents dans les pays en d & eacute;veloppement. Ils peuvent & ecirc;tre per & ccedil;us comme injustes, en plus de possiblement r & eacute;duire la motivation et le rendement des employ & eacute;s. Nous pr & eacute;disons que l'ajout d'une disposition de deuxi & egrave;me chance, soit la possibilit & eacute; d'annuler une p & eacute;nalit & eacute; pour rendement insuffisant & agrave; la suite d'une am & eacute;lioration subs & eacute;quente du rendement, pourrait accro & icirc;tre l'efficacit & eacute; des contrats de p & eacute;nalit & eacute;. Dans le cadre d'une quasi-exp & eacute;rience sur le terrain dans une entreprise qui compte deux installations de production & agrave; Ta & iuml;wan, nous avons appliqu & eacute; & agrave; une usine un contrat de p & eacute;nalit & eacute; conventionnel sans disposition de deuxi & egrave;me chance, et & agrave; l'autre, un contrat de p & eacute;nalit & eacute; avec disposition de deuxi & egrave;me chance. Nous observons une diff & eacute;rence consid & eacute;rable entre les effets des deux situations: le rendement des employ & eacute;s a baiss & eacute; de fa & ccedil;on consid & eacute;rable dans le cas du contrat conventionnel, mais n'a pas diminu & eacute; dans le cas du contrat contenant une disposition de deuxi & egrave;me chance. Une analyse plus pouss & eacute;e r & eacute;v & egrave;le que cette diff & eacute;rence est attribuable aux perceptions des employ & eacute;s concernant l'& eacute;quit & eacute;. Ces observations fournissent des renseignements utiles aux gouvernements, aux organismes non gouvernementaux et aux multinationales qui travaillent de concert pour accro & icirc;tre l'& eacute;quit & eacute; des pratiques de r & eacute;mun & eacute;ration & agrave; l'& eacute;chelle mondiale.