Wording and Saliency Matter: The Impact of Incentive System and Organizational Value Statement on Employees' Performance

What is it about?

As contemporary organizations place increasing emphasis on value statements in an effort to make employees feel valued by the organization, unintended effects on employee incentive systems can arise. While a value statement can increase the productivity of employees on fixed pay, it actually has a negative effect on the performance of piece rate incentivized workers. In August, the Business Roundtable released a document endorsed by over 180 CEOs emphasizing the role of corporations in society and the need to benefit all stakeholders. One of these key stakeholders is employees. This emphasis adopted by the Business Roundtable will likely increase the emphasis and importance placed on value statements espousing the value of an organizations' employees and encourage belongingness to the organization. Organizations need to understand that these value statements can impact employee performance in unexpected ways.

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