The Contingent Effect of Management Practices

This paper investigates how the success of a management practice depends on the nature of the long-term relationship between the firm and its employees. A large US transportation company is in the process of fitting its trucks with an electronic on-board recorder (EOBR), which provide drivers with information on their driving performance. In this setting, a natural question is whether the optimal managerial practice consists of: (1) Letting each driver know his or her individual performance only; or (2) Also providing drivers with information about their ranking with respect to other drivers. The company is also in the first phase of a multi-year initiative to remake its internal operations. This first phase corresponds to an overhaul of the relational contract with its employees, focusing exclusively on changing values toward a greater emphasis on teamwork and empowerment. The main result of our randomized experiment is that (2) leads to better performance than (1) in a particular site if and only if the site has not yet received the values intervention, and worse performance if it has. The result is consistent with the presence of a conflict between competition-based managerial practices and a cooperation-based relational contract. More broadly, it highlights the role of intangible relational factors in determining the optimal set of managerial practices

The Real Effects of Relational Contracts

Does the soft side of management matter? Many managers assert that firm culture is strongly correlated with productivity, but there are few robust tests of this assertion. In a set of field experiments, we study driver productivity within a large US logistics company that is arguably transitioning from one relational contract to another, while leaving formal practices and incentives unchanged. We find that sites under the new contract are associated with 1/8 percent higher productivity. Our findings suggest that relational contracts have a first-order effect on productivity and that they can be altered over time

Revisiting the Instrumentality of Voice: Having Voice in the Process Makes People Think They Will Get What They Want

Research on procedural justice has found that processes that allow people voice (i.e., input) are perceived as fairer, and thus elicit more positive reactions, than processes that do not allow people voice. Original theorizing attributed these effects to beliefs that the provision of voice enhances the likelihood of receiving desired outcomes, but subsequent research has generally argued that non-instrumental mechanisms actually underlie reactions to voice. In contrast to past research, we show that giving everyone voice does, in fact, lead them to believe that they are more likely to win a competition. However, this instrumental belief does not account for the effects of voice on perceived fairness. Results suggest that although voice does indeed have important instrumental meaning, this instrumentality does not actually explain why people value having a voice in the process

Fairness lies in the heart of the beholder: How the social emotions of third parties influence reactions to injustice

The present research explores third parties’ (e.g., jurors, ombudsmen, auditors, and employees observing others’ encounters) ability to objectively judge fairness. More specifically, the current research suggests that third parties’ justice judgments and reactions are biased by their attitudes toward the decision recipient and, in particular, the affective aspect of those attitudes as characterized by their felt social emotions. We explore how the congruence of a social emotion (i.e., the extent to which the emotion reflects feeling a subjective sense of alignment with the target of the emotion) can influence their evaluations of recipients’ decision outcomes. The five studies presented show that congruence can lead third parties to react positively to objectively unfair decision outcomes and, importantly, that the influence of social emotions on subjective justice judgments drive third party reactions to decisions, decision makers, and even national policies