Do CEOs exercise managerial discretion to save their jobs?

Chief Executive Officers (CEOs) wield considerable power and authority. In many industries and contexts, CEO turnover is studied in terms of antecedents, the event itself, and the related consequences. However, the extent to which CEOs exert their power and attempt to prevent their dismissal has not been thoroughly examined. In this study, we examine the role of CEOs exercising managerial discretion in their effort to prevent their own corporate demise. We hypothesize that CEOs cut discretionary expenses such as research and development, advertising, and rent in order to boost earnings and enhance financial performance. A sample of CEO turnover from Standard and Poor’s ExecComp database for the period 1992–1998 in US firms yielded 474 turnover firms and 2,066 control firm-years. We tested the effects of CEO turnover and managerial discretion on firm performance measured by cumulative abnormal stock returns. We also compared the turnover and non-turnover firms in terms of pattern of discretionary spending prior to CEO turnover. The results are consistent with our prediction that CEOs facing termination attempt to post higher earnings by reducing discretionary spending after controlling for firm performance, firm diversification, book to market ratio, and CEO ownership, industry-, and year dummies.     

The impact of a participatory organizational intervention on job stress in community health care institutions

The aim of the present study was to investigate the effect of a short-term participatory intervention in health care institutions in Norway on workers' control, other job characteristics, job stress, subjective health and job satisfaction. Participants (including managers and supervisors) were randomly allocated to intervention groups and to a control group. Actions to solve problems based on the employees' own perceptions of the main problems were seen as the key motivators for organizational improvement and increased control at the task and office level in the work situation. The main stressors identified by the participants in this study were lack of information, communication and respect between professions, as well as the need for professional and personal development. The participatory intervention had a positive, but limited effect on work-related stress, job characteristics, learning climate and management style, and seemed to have started a beneficial change process. There were no negative short-term effects on work-related stress and job demands. Organizational interventions may be a potential training ground for acquiring participatory skills and resources, and if sustained after the intervention period, they can have long-term effects on problem solving, job stress and employee satisfaction.     

Beyond chronological age. Examining perceived future time and subjective health as age-related mediators in relation to work-related motivations and well-being

Abstract

The aim of this study was to explore whether the association between depression and work characteristics (demands and control) is free from the subjective bias of employees. This study examined the relation between psychosocial work characteristics (job demands and job control) and major depression in 343 participants employed in three occupational sectors in Germany. Participants were divided into a case group and a mentally healthy control group. Since depression itself may bias the reporting of work characteristics were assessed twice: (a) objectively, by job analysis experts and (b) by employees' self-reports. Major depression was assessed according to DSM-IV criteria using an international standard clinical interview. The results showed that objective demand but not control was significantly associated with major depression. Employees who had suffered an incidence of depression had higher objective job demands than those in the control group. Self-rated job demands partially mediated the relationship between objective demands and depression. Additionally, employees in the case group perceived significantly less job control than those classed as mentally healthy. The results indicate that high job demands were associated with major depression, a finding that cannot be better explained by distorted response behaviour due to the depression. However, objectively assessed job control was not found to be related to depression.     

Attitudes,Expectations and Sharing

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Apology . Labour 19:4 801 .
Online publication date: 16‐Dec‐2005. Abstract. We explore the relationship between performance‐related pay and the attitudes and expectations of a representative sample of British workers. Our results suggest that employees who participate in productivity‐linked bonus schemes, discretionary bonus schemes, share ownership or profit sharing are more optimistic about future employment and pay and are generally more satisfied with their work environment. However, employees participating specifically in profit‐sharing schemes are less likely to work as hard as they can, ceteris paribus. This is an intriguing finding, insinuating as it does that group‐sharing schemes are unable to rout the temptation to free ride and thereby ensure a first best cooperative equilibrium.     

Increasing Staff Completion of Civil Commitment Forms Through Instructions and Graphed Group Performance Feedback

ABSTRACT

A three-leg multiple baseline design across behaviors was used to assess the effects of an instruction-andfeedback package on correct completion of three required civil commitment forms by psychiatric emergency room personnel. The forms were for notices of rights, imminent harm applications, and witness lists. The intervention program consisted of an individualized training component and weekly group feedback via graphs. The instruction-and-feedback package produced immediate and significant increases in correct completion of all three commitment forms; the effects were maintained across six months of follow-up data collection. Discussion addressed the effectiveness of the package, the effects of participant drop-out, the functions of the instruction and feedback components of the package, and ethical concerns.     

Daily recovery from work: The role of activities,effort and pleasure

Abstract

Knowledge of the cycle of work and recovery is crucial for protecting employee health and well-being and preserving working capabilities. However, the daily process of effort and recovery is not well understood. This study investigated how the time spent on activities in the work and off-job domains, and the pleasure and effort experienced while engaging in these activities, affect the daily recovery process. We expected higher levels of effort at work and during off-job time to be negatively related to recovery, and higher levels of pleasure at work and during off-job time to be positively related to recovery. We also hypothesized that pleasure would act as a buffer against the negative effects of effort. Data were collected by means of a five-day diary study (three measurements daily, before and immediately after work, and at bedtime) among 120 university academic staff. Fatigue and (low) vigour were used as indicators of (lack of) recovery. Multilevel analyses showed that pleasure in the work and off-job domains had beneficial effects on recovery. An adverse association between effort expenditure and recovery was lacking. However, in the work domain, a combination of unpleasant and effortful work activities was negatively related to recovery. These findings stress the importance of engaging in pleasant activities during work and off-job time.     

Effort-reward imbalance and work-home interference: a two-wave study among European male nurses

ABSTRACT

This one-year follow-up study among 1,421 male nurses from seven European countries tested the validity of the Effort-Reward Imbalance (ERI) model in predicting prospective vital exhaustion and work-home interference. We hypothesised that effort and lack of reward would have both main and interactive effects on future outcomes. Results of structural equation modelling (SEM) showed that effort was positively related to exhaustion and work-home interference, both simultaneously and over time. Lack of reward predicted increased exhaustion at follow-up, but effort-reward imbalance did not influence the outcomes. Additionally, Time 1 exhaustion predicted increased work-home interference and exhaustion at follow-up. These results do not support the ERI model, which postulates a primacy of effort-reward imbalance over main effects. Instead, the findings are in line with dual path models of job stress and work-home interference. Multi-group SEM showed partial cross-cultural metric invariance for the ERI measure of effort, but the ERI measure of rewards showed no metric measurement invariance, indicating its meaning is qualitatively different across cultures. Nevertheless, the main conclusions were markedly similar for each national sub-sample. We discuss the theoretical and practical implications of our study.     

The Effects of Individual Monetary Incentives With and Without Feedback

Abstract

This study examined the effects of an individual monetary incentive system with and without feedback to determine if feedback would supplement the effects of incentives. Participants were seven college students who performed a computerized task called SYNWORK. SYNWORK presented four sub-tasks concurrently: memory, arithmetic, visual monitoring and auditory monitoring. Participants earned points for correct responses. The dependent variable was the number of points earned. An ABAC design was used with A = individual monetary incentives without feedback, B = individual monetary incentives with feedback, and C = hourly pay with feedback. Sessions were 90 minutes, and there were 5 to 10 sessions per phase. The point scores of six of the seven participants increased when feedback was added to the incentive system but stabilized or continued to increase when feedback was removed. The feedback intervention was staggered in time across participants, and performance increased when feedback was added, hence the data suggest that feedback enhanced the effects of the incentives. One possible reason for the reversal failure is that feedback evoked higher levels of performance that were then maintained by the additional incentives. Because performance did not reverse, however, the results must be viewed cautiously.     

Assessing the cumulative effects of stress: The association between job stress and allostatic load in a large sample of Chinese employees

Abstract

Job stress can lead to various system dysfunctions, but until now no reliable biomarkers for its assessment have been identified. Allostatic load (AL) is an index that enables the cumulative effect on the body of chronic stress to be assessed, and is derived from a set of relevant biological measures. In this study, a 13-parameter index (building on the original 10-item index) was used to examine the relationship between job strain and AL. Participants were 1219 healthy Chinese employees. Job strain was measured using the Job Content Questionnaire, and AL was assessed by various possible stress responses, including blood pressure, cholesterol, indicators of glucose metabolism, and hormone and inflammation markers. AL in the high job strain group differed sharply from that in the low job strain group. The AL score was positively associated with age and educational level. Several individual parameters also differed between the two groups. Men scored significantly higher on AL and cardiovascular and metabolic health outcomes, whereas for women the associations appeared in the biological indicators. Analyses indicated that decision latitude (DL) and job demands were significantly related to AL. Job demands correlated significantly with the primary biological indicators and DL with the secondary health outcomes. In conclusion, this study provides evidence of the value of measuring allostatic load in assessing the chronic effects of job stress.     

The Relative Effects of Different Frequencies of Feedback on Work Performance

Abstract

This laboratory simulation examined the relative effects of two frequencies of feedback on work performance under hourly pay and incentive pay. The study had four experimental conditions: feedback delivered after every session under hourly pay and under incentive pay, and feedback delivered after every fourth session under hourly pay and under incentive pay. Thirty-five college students were randomly assigned to one of the four conditions. Each participant attended 24 thirty-minute sessions. Participants performed a simulated work task on the computer that consisted of computer-related activities such as dragging, clicking, and typing. The dependent variable was the number of correctly completed units of work. An analysis of covariance was conducted to analyze the data using pretest scores as a covariate. Participants who received feedback every session completed significantly more work units than participants who received feedback every fourth session. In addition, an interaction between feedback frequency and pay systems was found: Feedback delivered every session was more effective than feedback delivered every fourth session under the incentive pay system, but not under the hourly pay system. The results suggest that the relative effects of feedback frequency may depend upon the extent to which feedback is correlated with differential consequences for performance.     

Productivity gains by cellular manufacturing

This paper discusses some of the major factual results and discussions of the effects of implementation of a cellular manufacturing environment on the productivity of people, management and facilities, as was experienced in this study. It is suggested that significant improvements at very low costs are possible at managerial, and other work force levels, by introduction of appropriate production management systems. This is based on analysis of the changes in production costs and more importantly the behaviour of employees brought about by a first time implementation of cellular manufacturing in a company.     

Effects of sleep inertia on cognitive performance following a 1-hour nap

Abstract

This study investigated the effects of a 1-h nap on subsequent performance in spatial memory (SM) and logical reasoning (LR) tasks. The objective was to evaluate the duration of the effects of sleep inertia (SI). The performance was measured in two independent groups of subjects. The 1-h nap took place at 00:00 h in group 1 and at 03:00 h in group 2. In each task, the experimental design comprised one no-nap condition in which subjects had no sleep before the night tests, and a nap condition that comprised the 1-h nap followed by the test sessions. To measure the duration of SI effects, the subjects were tested in two 30-min sessions and the data in each session were analysed in sub-units of time of 3 min each. In each task the results showed no effects on accuracy, and no circadian effects of napping were found. In each task, analyses of pooled data of the two groups showed that the performance in the 1-h nap condition exhibited significant reductions of speed immediately following awakening, when compared with no-nap, reflecting SI effects. In SM, the slowing lasted 24 min, and 27 min in LR. Practical implications of the results are discussed.     

In sickness and in health: An exploration of spousal support and occupational similarity

Abstract

While many studies of interventions have focused on their content and immediate effects, less research has focused on the processes that may explain these effects. The purpose of this study was to show how process evaluation can be used to interpret the results of an intervention study in four industrial canteens in Denmark. Two canteens acted as intervention groups and two as comparison groups. Effects were measured by surveys before and after interventions, and observations and interviews were conducted to provide an in-depth understanding of processes. Analyses were conducted based on the responses from 118 employees. Results showed, contrary to expectations, improvements in working conditions and well-being in one intervention group and in one comparison group, whereas no improvements were found in the two remaining groups. Data from the process evaluation enabled a meaningful interpretation of these results, raising the possibility programme failure rather than theory failure, and thereby constituting an example of how process evaluation can shed light over the factors that may influence outcomes in controlled intervention studies.     

Managing Cost Salience and Procrastination in Projects: Compensation and Team Composition

The rising trend of projects with high‐skilled and autonomous contributors increasingly exposes managers to the risk of idiosyncratic individual behaviors. In this article, we examine the effects of an important behavioral factor, an individual's cost salience. Cost salience leads individuals to perceive the cost of immediate effort to be larger than the cost of future effort. This leads to procrastination in early stages and back‐loaded effort over the course of the project. We model the problem confronting the manager of a project whose quality is adversely impacted by such distortion of individual effort over time. Complementary to prior works focused on the planning and scheduling tasks of project management in the absence of human behavior, we find that managers should reward contributions made in earlier stages of a project. Our analysis also yields interesting insights on the project team performance: teams with diverse levels of cost salience will perform better than homogeneous teams. We also address another important facet of team composition, namely, the choice between stable and fluid teams, and find that the practice of creating fluid teams might have previously unrecognized benefits when behavioral aspects of projects are considered. We conclude with insights and organizational implications for project managers.     

Policies and management of reproductive risk in the workplace

Abstract

Seventy-three soldiers who had lost three nights sleep and 45 unfatigued soldiers completed a 25-minute computerized set of tasks derived from the pencil-and-paper kit of factor referenced ability tests. The fatigued soldiers produced more long-reaction times than die unfatigued group, but their accuracy was unaffected, in accordance with the ‘lapse hypothesis’ of sleep-loss effects. Two scores were derived from the data, one representing accuracy, and the other fatigue. A second study using 21 unfatigued students showed that differences in ability affected both of these scores, but that practice effects from repeated administration of the tasks improved only the fatigue score, not the accuracy score. The set of tasks could, with refinements, be used to obtain an objective measure of fatigue if used with experimental and control groups drawn from the same population.     

A Case Study Investigating the Effects of a Low-Cost Intervention to Reduce Three Attendance Behavior Problems in a Clerical Training Program

ABSTRACT

Operant learning principles were employed to design an intervention aimed at reducing the frequency of dysfunctional attendance behaviors among a group (N = 13) of low socioeconomic females completing a clerical/office simulation training program. The Federally funded simulation provided a setting in which subjects learned the rudimentary skills required for employment. A low cost coupon incentive system served as the independent variable which effectively reinforced proper attendance behaviors. Effectiveness of the intervention was evaluated using a multiple-baseline design. Results were practically significant reductions in dysfunctional behavior rates which generalized to actual work settings following posttraining employment. Findings are discussed in terms of satiation, skills transferability, cost, and subject participation.     

Social Connections and Incentives in the Workplace: Evidence From Personnel Data

We present evidence on the effect of social connections between workers and managers on productivity in the workplace. To evaluate whether the existence of social connections is beneficial to the firm's overall performance, we explore how the effects of social connections vary with the strength of managerial incentives and worker's ability. To do so, we combine panel data on individual worker's productivity from personnel records with a natural field experiment in which we engineered an exogenous change in managerial incentives, from fixed wages to bonuses based on the average productivity of the workers managed. We find that when managers are paid fixed wages, they favor workers to whom they are socially connected irrespective of the worker's ability, but when they are paid performance bonuses, they target their effort toward high ability workers irrespective of whether they are socially connected to them or not. Although social connections increase the performance of connected workers, we find that favoring connected workers is detrimental for the firm's overall performance.     

The manager's role in employees' successful return to work following back injury

Abstract

This study reports on the short-term effects of an educational programme for immediate supervisors on employees' back pain problems. The course was designed to help supervisors more efficiently deal with employees returning to work after being treated for back pain. Forty-seven supervisors who had personnel either undergoing treatment for back pain problems or were candidates for this treatment were invited to attend a one-day course. This educational package consisted of information about back pain and stressed specific behaviours which supervisors could use to help their employees successfully return to work. The results showed that 78% of the supervisors found the course to be satisfactory enough to recommend it to a colleague without hesitation. Furthermore, independent ratings made by the supervisors and their employees suggested that supervisors complied with the recommended programme. Returning employees, moreover, gave their supervisors significantly higher ratings of support than a control group whose supervisors had not attended the educational programme. It was concluded that an educational programme which alters specific supervisory behaviours may be an effective method of assisting employee return to work after treatment for back pain. Further research is needed to determine the long-term effects of such a programme on absenteeism due to illness.     

Reciprocal relationships between psychosocial work characteristics and sleep problems: A two-wave study

Sleep problems are common and impair the health and productivity of employees. Work characteristics constitute one possible cause of sleep problems, and sleeping poorly might influence wellbeing and performance at work. This study examines the reciprocal associations between sleep problems and psychosocial work characteristics. The participants were 1744 full-time employed individuals (56% women; mean age 38 years in 2007) from the Young Finns study who responded to questionnaires on work characteristics (conceptualised by the demand–control model and effort–reward imbalance model) and sleep problems (Jenkins Sleep Scale) in 2007 and 2012. Cross-lagged structural equation models are used to examine the associations. The results show that low control and low rewards at baseline predicted sleep problems. Baseline sleep problems predicted higher effort, higher effort–reward imbalance, and lower reward. Sleep problems also predicted lower odds for belonging to the low (rather than high) job strain group and active jobs group. The association between work characteristics and sleep problems appears to be reciprocal, with a stressful work environment increasing sleep problems, and sleep problems influencing future work characteristics. The results emphasise the importance of interventions aimed at both enhancing sleep quality and reducing psychosocial risks at work.     

Improving Program Outcome with Process-Based Performance Feedback

Abstract

Two studies, using an across participants multiple baseline design, assessed effects of different amounts of process and outcome performance feedback on instructor and child behavior in an early intervention program. Seven instructors, mostly university students, and one child with autism were observed over a 4 month period on measures of instructors' verbal instructions, prompts, and consequences, and correct child behavior. In Study 1, performance feedback contained verbal, written, and graphic information on instructor (process) and child (outcome) behavior, whereas in Study 2, only verbal process information was provided. Results show that both feedback procedures were equally effective in increasing correct instructor performance and correct child behavior. Conclusions are (a) that verbal process feedback alone was as effective as an extensive process plus outcome feedback, but easier to use and more efficient, and (b) that measures of performance error proved useful in detecting feedback effects on instructor behaviors that varied across time and program changes.