The Accounting Review Vol. 96 No. 5 2021
Cheating for the Cause: The Effects of Performance-Based Pay on Socially Oriented Misreporting
Abstract
We examine the effect of performance-based pay on misreporting intended to benefit a social mission. We show that performance-based pay decreases people's propensity to misreport for a social mission in a not-for-profit setting (Experiment 1). We similarly show that in a for-profit setting, performance-based pay also decreases misreporting propensity for a social mission, although not for a non-social mission (Experiment 2). Finally, using a framed field experiment with participants attending a conference hosted by a real charity, we show that performance-based pay reduces actual misreporting when misreporting leads to more donations for the charity (Experiment 3). These results are consistent with our theory suggesting that, relative to fixed pay, performance-based pay imposes additional costs on misreporting employees' self-concepts of benevolence and honesty.
- DOI
- 10.2308/tar-2019-0357
- Volume
- 96
- Issue
- 5
- Pages
- 317-336
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref