Three essays on reward system design for mid-level managers

Abstract

This work is divided into three parts. In chapter 1, we explore how middle level managers from a multinational company operating in the service sector perceive different elements of the reward system and we examine whether and how the perceptions vary across groups of individuals at different organizational levels. We attempt to provide a comprehensive picture of the array of rewards offered to managers in the company setting, addressing the 'modality' of the reward construct through the multiple facet approach elaborated by Elizur (1984) and Elizur et al.(1991). Specifically, the opinions of 1.771 managers were collected through a survey instruments derived from Elizur's work. Non-parametric statistical analysis lead to the identification of several significant differences in the perception of instrumental, cognitive and affective work outcomes. The findings suggest affective and cognitive rewards are deficient for mid-echelon managers. Managerial groupings at the higher and lower mid level manager echelons held differing views. With this extended approach to capturing desired rewards, patterns of meaningful incentives emerge that help to specify the design of means to motivate mid level managers. Chapter 2 extends the evidence gathered in the previous essay, by investigating, through qualitative enquiry, the consequences of the introduction of mechanisms of personnel control on the control package designed for middle level managers. The empirical analysis was based on Merchant’s object-of-control framework about the different forms of management controls. Specifically, we documented the intended and unintended consequences of the introduction of ex ante control mechanisms associated with training on the provision of rewards for results, through a 3-years longitudinal case study on the research setting above. Our evidence shows a two-stages interaction pattern in which the introduction of a control mechanism associated with training was triggered by outcomes generated by the existing control package, in terms of output controls. At the same time, unintended significances of the introduction called for a revision of existing ex-post control tools. The study in chapter 3, investigates whether and how the perception of the ’internal ethical environment’ (Trevino et al., 1998) varies across groups of managers at different hierarchical levels. We drew on research on social and organizational identity to investigate whether and how different views on the ethical environment are retained by different sub-groups of managers within a single organization. Extant research suggests that senior managers are likely to express significantly more positive perceptions of organizational ethics when compared with employees in non-managerial positions, however it remains silent on middle and lower managers’ perception of ethical environment, even though these managers act as ’linking pins’, possibly influencing ethical decision-making and behavior of other organizational members, both upwards and downwards. Data from over 1500 respondents were collected in a national branch of a US-based, FTSE4GOOD organization, operating in the service sector. Our findings suggest that perception of the ethical environment varies significantly across groups of organizational members. Consistent with our predictions, senior managers are likely to hold a rosier perspective of the environment for ethics, while less favorable attitudes are manifested by middle- and lower-level managers. However, the perception of the internal ethical environment fails to be a “top-down phenomenon” in our research setting. Implications for research and practice are discussed.