EC 9 Flashcards
Extrinsic incentives bias
: people predict that others are more motivated by extrinsic incentives and
less motivated by intrinsic incentives compared to themselves
Cardinaels (2019)
Assessing the sources of employee motivation is an important step in order to design
an appropriate management control system
Experience with the employee’s task leads to a better assessment of the employee’s motivational sources and reduces the reliance on performance-based incentives but (1) the experience needs to be long enough and (2) with exactly the same task
The extrinsic incentives bias suggests that (1) we are not very good in correctly assessing the importance of intrinsic motivation and (2) the reliance on performance based incentives is likely to be higher than what is strictly needed
This result can help to better design traineeship programs, managerial rotation
programs, and internal promotion policies.
Behavioral integrity
Practicing what you preach
Direct effect of BI
BI sends a signal of trust towards the junior auditor and it can be argued that a learning orientation
(LOB) (such as reflecting about past performance) is more likely to be observed when the leader is a
trustworthy person
Indirect effect of BI
▪ Psychological safety: a shared belief held by the members of a team that the team is safe for interpersonal risk taking
▪ Interpersonal trust is an important prerequisite to create a team environment in which one feels safe to speak up. BI
is a trust-building component that can stimulate psychological safety
▪ In a psychologically safe environment, team members can stay true to themselves and issues can be openly
discussed. Typically, people feel more satisfied in such an environment
▪ In a psychologically safe environment, junior auditors can ask questions and openly discuss (potential) errors and
issues they struggle with. A psychologically safe environment thus signals that learning-oriented behavior is valued
