A Survey Study into Participation in Goal Setting, Fairness, and Goal Commitment: Effects of Including Multiple Types of Fairness

Abstract

Building on goal setting and social exchange theory, this study extends prior research about how employee participation in setting annual performance and development goals is related to goal commitment via increased perceptions of fairness, through including other (correlated) types of fairness than typically studied in management accounting research. Survey data are collected from 135 employees and analyzed using structural equation modeling. The results demonstrate participation is directly positively related to goal commitment as well as indirectly via distributive and informational fairness. In addition, the statistical relation between procedural fairness and goal commitment is suppressed: it ranges from significantly positive to significantly negative dependent on what other variables are included in the analyses. As a second contribution, the suppressor phenomenon and its implications are extensively discussed. Suppression mainly occurs when there is much overlap in the independent variables, for instance when multiple control practices are examined simultaneously as systems or packages. JEL Classifications: C18; C20; C30; L84; M12; M41; M52; M54. Data Availability: Data are available via the author until at least five years after publication.

The effect of enabling versus coercive performance measurement systems on procedural fairness and red tape

“…that perceived procedural fairness is high. This line of reasoning is seen in the procedural fairness literature, where correctability is viewed as a determinant of procedural fairness (Cugueró-Escofet & Rosanas, 2013;Groen, 2018;Leventhal, 1980;Leventhal et al, 1980).…”

“…Several scholars have investigated the characteristics of management control systems that make people experience them as more or less fair. These studies have focused on a range of characteristics including subjective versus objective systems (Bellavance et al, 2013), diversity of performance measures and a focus on outcome versus effort in performance measures (Hartmann & Slapniçar, 2012), bonus payments (Voußem et al, 2016), and participation in goal setting (Groen 2018). Some also highlight the importance of the management control system for procedural fairness and, for example, emphasize that an important dysfunctional consequence of a management control system can be that the system is not experienced as fair by the employees (see e.g.…”

“…Unlike procedural fairness, which has been studied in the management accounting and control literature (e.g. Groen 2018;Hartmann & Slapniçar, 2012), the red tape concept that we include as another outcome variable in our study has not been well addressed.…”

“…Previous studies convincingly show that involving employees and giving them voice increases the perceived fairness of procedures (e.g. Colquitt et al, 2001;Groen, 2018, Lind & Tyler, 1988. The enabling process also ensures that the opinions of various groups affected by the decision are taken into account, which is an important condition for procedures to be perceived as fair (Leventhal et al, 1980).…”

Psychology in management accounting and control research: an overview of the recent literature

“…She complements the self-determination theory with the social exchange and goal-setting theory. Social exchange theory focuses on the social phenomenon of offering some benefit for reciprocation (Blau 1964;Groen 2018). Conversely, goal-setting theory relates to defining effective goals in work settings and posits that goals affect motivation and performance (Locke and Latham 2002).…”