Reward Taxation, Reward Type, and Employee Effort

• 成果类型: Article
• 署名作者: Bauer, Tim D.; Deore, Aishwarrya; Presslee, Adam; Shaw, Joanna
• 署名单位: University of Waterloo; Georgetown University; Central Michigan University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2023-0450
• 发表日期: 2025
• 页码: 55-80

摘要

Performance-contingent cash and tangible rewards are commonly used to motivate employees, and the taxation of such rewards is unavoidable. We use two experiments to examine how the effect of reward taxation on employee effort varies by reward type. In Experiment 1, we find reward taxation decreases positive affect, increases negative affect, and decreases reward attractiveness for employees when rewards are tangible, but not when rewards are cash. In Experiment 2, we find reward taxation reduces employee effort when rewards are tangible, but not when rewards are cash. Collectively, this evidence advances knowledge at the intersection of tax and management accounting by explaining why reward type alters the effect of reward taxation on employee effort. Moreover, our experimental results inform managers of a potential downside to using tangible rewards to motivate employees.