Exploring the interdependence between gainsharing and performance evaluation in a credit union
DOI:
https://doi.org/10.1590/1808-057x202112270Keywords:
management control practices, complementarity, gainsharing, performance evaluation, credit unionAbstract
This study aims to investigate the interdependence between gainsharing and performance evaluation (objective and subjective) in a credit union. There is a recent debate on the interdependence between management control practices, which emerges from the discussion of control packages or systems. This study delves into this discussion by investigating the complementarity between gainsharing (group incentive modality) and performance evaluation in a credit union context, given the need for qualitative empirical studies on this phenomenon. This study is considered relevant because the joint use of management control practices can allow organizations to effectively mitigate control problems such as lack of direction, motivation, and competence. This research promotes insights into management control practices’ operation – given the discussion of complementarity between gainsharing, which is not a prevalent incentive system in most organizations – and objective and subjective performance evaluation. The methodology consists of a qualitative field study in a credit union using data collection, interviews, and access to documents analyzed using an interpretive approach. This research presents evidence on the phenomenon of interdependence between management control practices, adding to the literature by addressing different forms of complementarity between a group incentive system in the form of gainsharing and performance evaluation. It became evident that gainsharing reinforces the objective performance evaluation process by mitigating motivation and direction problems, while the subjective performance evaluation compensates the objective performance evaluation by shifting the focus of the evaluation to the individual’s skills.
Downloads
References
Aguiar, A. B. D., Teixeira, A. J. C., Nossa, V., & Gonzaga, R. P. (2012). Associação entre sistema de incentivos gerenciais e práticas de contabilidade gerencial. Revista de Administração
de Empresas, 52(1), 40-54.
Ahrens, T., & Chapman, C. S. (2006). Doing qualitative field research in management accounting: Positioning data to contribute to theory. In C. S. Chapman, A. G. Hopwood, &
M. D. Shields (Ed.), Handbooks of management accounting research (Vol. 1, pp. 299-318). Amsterdam, Holanda: Elsevier.
Arthur, J. B., & Kim, D. O. (2005). Gainsharing and knowledge sharing: the effects of labour-management co-operation. The International Journal of Human Resource Management, 16
(9), 1564-1582.
Bedford, D. S. (2020). Conceptual and empirical issues in understanding management control combinations. Accounting, Organizations and Society, 86, 101187.
Bedford, D. S., Malmi, T., & Sandelin, M. (2016). Management control effectiveness and strategy: An empirical analysis of packages and systems. Accounting, Organizations and Society, 51, 12-28.
Beuren, I. M., Von Eggert, N. S., & Santos, E. A. (2020). Influência da avaliação de desempenho formal e seus mecanismos na confiança interpessoal entre gestores: justiça processual e
qualidade do feedback percebidos. Organizações & Sociedade, 27(92), 113-131.
Bol, J. C. (2008). Subjectivity in compensation contracting. Journal of Accounting Literature,
, 1-32.
Bol, J. C., & Smith, S. D. (2011). Spillover effects in subjective performance evaluation: Bias and the asymmetric influence of controllability. The Accounting Review, 86
(4), 1213-1230.
Bonner, S. E., & Sprinkle, G. B. (2002). The effects of monetary incentives on effort and task performance: theories, evidence, and a framework for research. Accounting, Organizations and Society, 27(4-5), 303-345.
Brickley, J., Smith, C., & Zimmerman, J. (2015). Managerial economics and organizational architecture. New York, NY: McGraw-Hill Education.
Case, J. (1998). The open-book experience: Lessons from over 100 companies who successfully transformed themselves. Basic Books.
Chenhall, R. H., & Langfield-Smith, K. (2003). Performance measurement and reward systems, trust, and strategic change. Journal of Management Accounting Research, 15(1), 117-143.
Choi, J. W. (2020). Studying “and”: a perspective on studying the interdependence between management control practices. Accounting, Organizations and Society, 86, 101188.
Chua, W. F. (1986). Radical developments in accounting thought. Accounting Review, 61
(4), 601-632.
Crotty, M. (1998). The foundations of social research: meaning and perspective in the research process. Thousand Oaks, CA: Sage.Demartini, M. C., & Otley, D. (2020). Beyond the system vs.
package dualism in performance management systems design: a loose coupling approach.
Accounting, Organizations and Society, 86, 101072.
Doucouliagos, H., Laroche, P., Kruse, D. L., & Stanley, T. D. (2020). Is profit sharing productive? A meta‐regression analysis. British Journal of Industrial Relations, 58(2), 364-395.
Dubois, A., & Gadde, L. E. (2002). Systematic combining: an abductive approach to case research. Journal of Business Research, 55(7), 553-560.
Ferreira, A., & Otley, D. (2009). The design and use of performance management systems: an extended framework for analysis. Management Accounting Research, 20(4), 263-282.
Frezatti, F. (2009). Orçamento empresarial: planejamento e controle gerencial. São Paulo, SP: Atlas.
Friis, I., Hansen, A., & Vámosi, T. (2015). On the effectiveness of incentive pay: exploring complementarities and substitution between management control system elements in a
manufacturing firm. European Accounting Review, 24(2), 241-276.
Gerhart, B., Rynes, S. L., & Fulmer, I. S. (2009). 6 pay and performance: individuals, groups, and executives. Academy of Management Annals, 3(1), 251-315.
Gibbs, M., Merchant, K. A., Stede, W. A. V. D., & Vargus, M. E. (2004). Determinants and effects of subjectivity in incentives. The Accounting Review, 79(2), 409-436.
Gomez-Mejia, L. R., Welbourne, T. M., & Wiseman, R. M. (2000). The role of risk sharing and risk taking under gainsharing. Academy of Management Review, 25(3), 492-507.
Grabner, I., & Moers, F. (2013). Management control as a system or a package? Conceptual and empirical issues. Accounting, Organizations and Society, 38(6-7), 407-419.
Grafton, J., Lillis, A. M., & Widener, S. K. (2010). The role of performance measurement and evaluation in building organizational capabilities and performance. Accounting, Organizations and Society, 35(7), 689-706.
Groen, B. A., Wouters, M. J., & Wilderom, C. P. M. (2017). Employee participation, performance metrics, and job performance: a survey study based on self-determination theory. Management Accounting Research, 36, 51-66.
Hartmann, F., & Slapničar, S. (2012). The perceived fairness of performance evaluation: the role of uncertainty. Management Accounting Research, 23(1), 17-33.
He, W., Li, S. L., Feng, J., Zhang, G., & StuHe, W., Li, S. L., Feng, J., Zhang, G., & Sturman, M. C. (2020). When does pay for performance motivate employee helping behavior? The
contextual influence of performance subjectivity. Academy of Management Journal, (no prelo).
Ittner, C. D., Larcker, D. F., & Meyer, M. W. (2003). Subjectivity and the weighting of performance measures: Evidence from a balanced scorecard. The Accounting Review, 78
(3), 725-758.
Jordan, S., & Messner, M. (2012). Enabling control and the problem of incomplete performance indicators. Accounting, Organizations and Society, 37(8), 544-564.
Jovanović, T., Arnold, C., & Voigt, K. I. (2017). Cooperative banks in need of transition: the influence of Basel III on the business model of German cooperative credit institutions.
Journal of Co-operative Organization and Management, 5(1), 39-47.
Kunz, J. (2015). Objectivity and subjectivity in performance evaluation and autonomous motivation: an exploratory study. Management Accounting Research, 27, 27-46.
Kgoedi, T., & Pillay, A. S. (2018). The impact of compensation on the performance of employees at a bank in Mpumalanga. Journal of Management & Administration, 2018(2), 135-162.
Lau, C. M., & Moser, A. (2008). Behavioral effect of nonfinancial performance measures: the role of procedural fairness. Behavioral Research in Accounting, 20(1), 55-71.
Lukka, K. (2014). Exploring the possibilities for causal explanation in interpretive research.
Accounting, Organizations and Society, 39(7), 559-566.
Malmi, T., & Brown, D. A. (2008). Management control systems as a package: opportunities, challenges and research directions. Management Accounting Research, 19(4), 287-300.
Masternak, R. L., & Ross, T. L. (1992). Gainsharing: a bonus plan or employee involvement?
Compensation & Benefits Review, 24(1), 46-54.
Merchant, K. A., & Otley, D. (2020). Beyond the systems versus package debate. Accounting, Organizations and Society, 86, 101185.
Merchant, K. A., & Van der Stede, W. A. (2014). Management control systems: performance measurement, evaluation and incentives. London, United Kingdom: Pearson Education.
Moers, F. (2005). Discretion and bias in performance evaluation: the impact of diversity and subjectivity. Accounting, Organizations and Society, 30(1), 67-80.
Nyberg, A. J., Maltarich, M. A., Abdulsalam, D. D., Essman, S. M., & Cragun, O. (2018). Collective pay for performance: a cross-disciplinary review and meta-analysis. Journal of Management,
(6), 2433-2472.
Pizzini, M. (2010). Group‐based compensation in professional service firms: an empirical analysis of medical group practices. The Accounting Review, 85(1), 343-380.
Timmermans, S., & Tavory, I. (2012). Theory construction in qualitative research from grounded theory to abductive analysis. Sociological Theory, 30(3), 167-186.
Van Veen-Dirks, P. (2010). Different uses of performance measures: the evaluation versus reward of production managers. Accounting, Organizations and Society, 35(2), 141-164.
Welbourne, T. M., & Gomez-Mejia, L. R. 1995. Gainsharing: A critical review and a future research agenda. Journal of Management, 21(3), 559-609.
Woods, A. (2012). Subjective adjustments to objective performance measures: the influence of prior performance. Accounting, Organizations and Society, 37(6), 403-425.
Zondo, R. W. (2018). The impact of gainsharing in the automotive parts manufacturing industry of South Africa. South African Journal of Economic and Management Sciences, 21(1), 1-8.
Downloads
Published
Issue
Section
License
Copyright (c) 2021 Revista Contabilidade & Finanças
This work is licensed under a Creative Commons Attribution 4.0 International License.
The content of the article(s) published in the RC&F are of the entire liability of the authors, including with regard to the truth, updating and accuracy of data and information. The authors shall assign the rights in advance to the Department of Accounts and Actuarial Sciences of the FEA/USP, which shall permit the publication of extracts or of the whole, with prior permission, provided that the source is cited (Creative Commons – CCBY).
RC&F shall not charge a fee for the submission of articles. The submission of articles to RC&F shall imply that the author(s) authorizes/authorize its publication without the payment of author’s rights.
The submission of articles shall authorize the RC&F to adjust the text of the article(s) to their publication formats and if necessary, to make spelling, grammar and regulatory changes.
