Crowd-based ratings have become one of the most widely used forms of performance measurement. They inform customers, job seekers, and investors, provide firms with diagnostic feedback, and are increasingly tied to employee evaluation and pay. Accounting research, however, has paid little attention to how the design of these measurement systems shapes their quality. We examine a change in Amazon’s rating system that removed a small participation friction (“sludge”), the requirement to write a text review when submitting a star rating. Using 77 million product-week observations, we find that removing this friction broadened participation by previously silent, authentic customers and diluted the influence of paid raters, making rating manipulation less effective. Composite ratings became more informative. Their alignment with independent expert quality assessments strengthened, and the sensitivity of future sales to ratings nearly doubled. Our findings suggest that crowd-based performance measures are not passive aggregators of dispersed information; their informativeness depends critically on design choices that govern who participates in the measurement process.
We study principals’ use of performance information to allocate human capital development resources to underperforming agents. We use proprietary data from a retail firm that sets uniform, noncalibrated performance targets to ensure consistent quality and customer experience across all stores. Unlike calibrated targets, uniform, noncalibrated targets do not account for heterogeneity in local conditions. Given that human capital development is costly, we predict and find that principals do not support all agents who underperform on noncalibrated targets. Instead, they use relative performance information and concentrate support on underperforming agents who outperform their geographical peers. In contrast, for calibrated targets, we find no evidence that principals rely on relative performance; agents who underperform calibrated targets are generally eligible for human capital support. Consistent with our assumption that relative performance is informative about returns to human capital investment, we find that support for underperforming agents who outperform their peers improves performance.
The body is known in accounting primarily as an object to be trained and disciplined. In this paper we argue for the reverse. Based upon a case study of the implementation of Results-Based Management in a large NGO, we argue that the body must also be conceived as an active agent in the enactment of accounting, not merely its endpoint. We argue that situated bodily activations in everyday accounting practice can significantly condition how accounting takes shape and evolves over time. Borrowing from work in cognitive psychology and the sociology of resonance, the paper highlights how the drawing on the body and its varying mobilization in different interaction settings can change our preference for accounting's conceptual modeling which then feeds back also in the ways in which accounting is thought of and practiced. We refer to this silent and, so far, unacknowledged force that contributes to accounting's ongoing transformation as the pursuit of resonant accounting. While taking hold of us at tacit levels and sometimes intermingling with more obvious agendas and politics, we argue that an embodiment agenda can revitalize many existing debates in practice-oriented accounting research, literature on visualization, and perspectives on everyday resistance.
This paper contributes to a long-standing debate in the audit literature about the place of professional judgement within the constraints of the formal audit process. Responding to recent calls for deeper exploration, we examine how auditors exercise judgement when facing a practical challenge they perceive as novel, for which they are unable to easily deploy prior understandings and judgement scripts. Drawing on semi-structured interviews with practicing auditors and the Routine Dynamics (RD) perspective, emphasising patterns of routine action as having internal dynamics, we provide a nuanced account of how auditors progress from the position of relative epistemic obscurity to being comfortable enough to form a conclusion. Our findings show how auditors performed routines to establish social, temporal, and spatial relationalities within and beyond the present audit context, enabling them to nuance their interpretations and grow confident in their judgements. We reveal how auditor judgement is continuously present but fluctuates in intensity, depending on the auditors’ reflexive intent during individual routine performances, resulting in the augmentation or curtailment of opportunities for inference. We also show how auditors accrue comfort in their judgements in a progressive manner along a continuum, spanning from largely ritualistic performances to the more effortful, inferentially intensive ones that together shape how auditors grapple with novelty.
We propose life history (LH) theory as an overarching theoretical explanation of CEO preferences and decisionmaking. LH theory has the potential to integrate prior research on variation in top executives' impact on decision outcomes and to demonstrate how observable differences in behavior can be explained by evolutionary drivers. According to LH theory, individuals pursue fast or slow LH strategies. Fast individuals tend to follow accelerated reproduction strategies and engage in impulsive, opportunistic, and risk-seeking behavior. We theorize how CEO LH strategies shape both on-the-job and off-the-job decisions and thus add to a growing body of research on evolutionary drivers of preferences and decision-making in accounting. We measure CEO LH strategies based on biodemographic micro-data related to reproductive behavior. Our findings linked to on-the-job decisions suggest that firms managed by CEOs who pursue fast LH strategies exhibit more financial irregularities, lower accounting conservatism, and higher earnings management. Findings related to CEO off-the-job decisions show that fast CEOs are more likely to engage in criminal behavior and to have a higher conspicuous consumption and a higher personal leverage. By applying an LH theory lens, we reconcile and advance prior fragmented research on CEO preferences by showing a clear theoretical link between on-the-job and off-the-job decisions.
Organisational accounts are often awarded considerable significance in societies, not least because of their proposed beneficial implications. However, we argue that in accounting research the narrative (non-financial) accounts, often given by organisations in more than one language, have been approached in a limited way. Drawing on foundational concepts from the discipline of Translation Studies, we demonstrate that accounts provided in different languages are not just one equivalent account copied across languages but in fact an 'account multiple' of several parallel accounts. Organisations (can) use such parallel accounts to address different audiences, simultaneously constructing different worlds where accountability does not remain the same. Alongside our theoretical discussion, we illustrate parallel accounts through an empirical analysis of the Finnish and English language account(s) a Finland-based MNC gave on its social responsibility. We argue that considering different language accounts as parallel accounts has significant implications for research on narrative reporting, including how scholars interpret organisational accounts, their use and potential implications, with consequences extending further into research transparency, ethics and quality.
Over the past two decades, policy and regulation in social and healthcare settings, as well as across public service delivery more broadly, have placed increasing emphasis on "user voice" and "user experience" in the commissioning and evaluation of services. Yet the formats and methods through which such accounts of user feedback should be produced often remain indeterminate. This paper examines the organizational processes involved in eliciting, assembling, and representing "user voice" within a large social care organization. Drawing on an ethnographic study, we investigate how the organization responds to diverse user feedback requests from external bodies, such as commissioners and regulators, as well as to internal demands for useable and appropriate accounts. Building on Hacking's concept of dynamic nominalism and his later engagement with Goffman, we analyse how user voice is "made up" through processes of tracing, framing, and connecting in the interstices between locally situated lived experiences of service users and top-down professional and regulatory discourses of care and service quality. Our analysis demonstrates the multiplicity, ambiguity and situational malleability of user voice, revealing how it both expands and escapes classification. Together, these dynamics highlight the lateral, transversal movements that occur in the interplay between top-down abstract classifications and bottomup practices and situated concerns of the classified. The paper concludes by reflecting on both the organizational appeal and the potential dangers of demands for user voice.
Employers often give employees general pay increases that are not tied to individual performance. These pay increases can either be unconditional fixed pay raises such as cost-of-living adjustments or be tied to risky firm-level measures of performance (e.g., profit-sharing). We use two experiments and a survey to investigate how employees' position in the firm's value chain affects their psychological ownership of the firm and subsequently their preferences for different types of pay increases. We find theory-consistent evidence that employees exhibit higher levels of psychological ownership of their organization when they add value to their firm's products and services directly (i.e., are primary workers who produce goods or services) rather than indirectly (i.e., are support workers such as janitorial or safety staff) and that this in turn increases their preferences for a profit-sharing pay increase relative to an unconditional pay increase. We discuss the implications of adopting a “value chain” perspective when designing employee compensation packages.
Firms generally seek to set budget targets with similar levels of expected difficulty each period. However, variability in realized budget difficulty across periods can occur, resulting in unstable budget difficulty. Although variability in budget difficulty arguably reduces the value of preset fixed budget targets for performance evaluation, we develop theory that predicts unstable (relative to stable) budget difficulty will increase employee performance over time. Specifically, we predict that unstable budget difficulty incentivizes greater attempts at ability improvement to prepare for future periods of potentially higher difficulty. Our experimental results support this theory. We also find evidence that suggests the ability improvement from unstable settings is greater for moderate, relative to low, typical difficulty levels. These results significantly improve our understanding of the effect of fixed budgets when budget difficulty is likely unstable.
Whereas previous research has largely focused on the top-down establishment of the business partner role, we study bottom-up efforts by individual management accountants to increase their involvement in business partnering and the association of these efforts with their personality. Taking a job crafting perspective, we argue that management accountants may self-initiate changes in their job boundaries toward business partnering. We further argue that management accountants’ job crafting is associated with their plasticity, a disposition for exploration, and the pursuit of new experiences. Drawing on a survey among management accountants employed at a large European bank, we find support for our hypotheses that plasticity has a positive association with job crafting and, through job crafting, with business partnering. Interestingly, this finding particularly holds for management accountants who are not formally required to act as business partners. Our results thus underline that plasticity is a personality trait that can give rise to self-initiated role changes toward business partnering. The results also show that the positive association between job crafting and business partnering is stronger in contexts of tight financial control, which supports our theoretical argument that such contexts provide a greater potential for enhancing the meaningfulness attached to business partnering. Overall, our study highlights that business partnering among management accountants is not inherently linked to their formal job descriptions. Rather, it may emerge as a consequence of self-initiated changes to the job undertaken by individuals possessing appropriate personality traits.
This study investigates the joint effects of the extent of superior discretion in bonus allocations and the degree of mutual monitoring within teams on team output and unproductive influence activities of employees. Increasing discretion granted to superiors allows them to use their private information to motivate effort. Prior literature, however, also stresses that increasing discretion induces employees to engage in unproductive activities to influence bonus allocations. Drawing on behavioral theory, I argue and show that when superiors only have narrow discretion over bonus allocations and, hence, employees have few pecuniary incentives to engage in influence activities, team output increases with higher degrees of mutual monitoring in teams. In this case, employees are better able to effectively coordinate their efforts. This positive effect of mutual monitoring, however, diminishes as superior discretion over bonus allocations increases. In this case, employees’ greater engagement in influence activities undercuts their ability to coordinate on high team output with higher degrees of monitoring. This study contributes to the literature on discretionary bonus pools by providing evidence on the joint effects of superior discretion and mutual monitoring on team outcomes and by identifying conditions under which limiting superior discretion becomes more beneficial.
In this article, we draw on the writings of Nigerian-born sociologist Peter P. Ekeh and, using extensive and hard-to-reach fieldwork data, we seek to understand how members of the Civic Public—the political and business elite—managed to obscure and obfuscate their corruption via accounting tools and strategies at the expense of the communities they serve, i.e., the Primordial Public. We find that members of the Civic Public engaged in a series of accounting schemes—some simple, others complex—to divert vast sums of much-needed funds away from the intended beneficiaries of a major charitable initiative established to provide aid for the un(der)-employed youth of Ghana. We make important contributions to the study of accounting, corruption, and morality. First, we disaggregate amorality from morality, situating these terms both theoretically and contextually, before discussing how members of the primordial public are systemically and culturally socialized to the elite's amorality. We build on and extend Ekeh's arguments in two ways. First, we discuss the emergence of a third public, which we call the “In-between”. Second, we argue that members of this third public are increasingly at risk of being dragged into morally dubious actions by and on behalf of their elite peers as they are persuaded toward morally dubious actions and behaviours.
We study how a rankings network, comprised of people and things, crafted and recrafted a counter-competitive soft ranking: the Swedish Municipality Quality Public Ranking, between 2007 and 2020. Using actor-network theory as a sensitising framework, we focus on two key interrelated dimensions of rankings work: (1) actor enrolment and (2) calculative design. We highlight that these two dimensions could conflict, documenting three key inflexion points, when actor efforts to manage tensions transformed the operation of the ranking. We also show that a counter-competitive ranking can be built and used for decades; rankings need not be engines of competition. Rankings, as composite indices, have been further criticised as oversimplified, non-rigorous tools. We show that multiplicity may not be more efficacious. Here, ensuring multiplicity in enrolment (rapid increase in municipalities enrolled) and calculative design (no composite index, multiple rankings, secondary indicators, peer selection for comparison) created a ranking that was too complex and too 'soft'. Over time, while quality controllers were engaged, other key stakeholder groups (politicians and functional managers) lost interest. We also note how the development of a soft ranking may enable the professionalisation of a new learning-oriented occupational group of quality controllers.
Busy seasons are common in public accounting. Data analytics (DA) potentially help auditors achieve heightened performance demands during busy seasons, but audit firms struggle to recruit and maintain a workforce that keeps up with evolving audit technologies. In the current environment where audit firms embrace technological innovations and regulators pay increasing attention to the role that leadership plays in audit firms, how leadership traits affect auditors' reliance on DA is an important question. Recruiting Big Four auditors as participants, we experimentally test how openness and perfectionism leadership traits interact with an environmental factor (i.e., time pressure) and a human factor (i.e., subordinates' familiarity with DA) to affect auditors' use of DA. We show that leadership perfectionism encourages auditors who are less familiar with DA to use DA under time pressure. In contrast, leadership openness does not affect auditors' use of DA directly, but interacts with time pressure to indirectly affect auditors' use of DA via perceived accountability and benefits/costs of using DA. We contribute to the auditing literature and practice by showing how perfectionistic leaders can help audit firms that wish to diffuse audit innovations to overcome the challenges associated with time pressure and auditors' lack of familiarity with DA. More broadly, our findings add to the management and leadership literatures by showing that perfectionism has benefits for firms’ innovation diffusion, and it is more effective under situational constraints such as tight deadlines.
We use two experiments to examine how the design of performance evaluation criteria influences agents' information processing in complex decision-making tasks. Drawing on goal hierarchy theory, we predict that, when agents are evaluated on the actions they take to perform their task (low-level evaluation criteria), they will focus primarily on salient cues in the task setting, whereas evaluating how agents’ work impacts organizational objectives (high-level evaluation criteria) will increase their attention to less salient yet relevant information cues. As predicted, in the first experiment, we find that agents exhibit the numerosity heuristic under low-level evaluation criteria, indicative of over-attention to salient task cues, but not under high-level criteria. In the second experiment, we find that, when making performance predictions, agents under low-level evaluation criteria fixate on summary earnings measures while not attending adequately to less salient cues, and high-level evaluation criteria mitigate this fixation. Taken together, these findings provide convergent support for our theory. We discuss the implications of our findings for accounting research and practice.
This paper proposes that individuals with higher intolerance of uncertainty are more prone to misreporting their performance in internal reporting settings when there is high performance evaluation uncertainty. In contrast, under low performance evaluation uncertainty, intolerance of uncertainty does not affect performance misreporting. We test this prediction across six studies. Studies 1-4 operationalize performance evaluation uncertainty through supervisor's word-deed inconsistency and examine the effect in real-world (Studies 1-2) and controlled experimental settings (Studies 3-4). To assess generalizability, Study 5 manipulates leadership and organizational change and Study 6 manipulates market change to create different levels of performance evaluation uncertainty. Across all six studies, we find consistent support for our hypothesis. Individuals with higher intolerance of uncertainty experience stronger uneasy, negative feelings (e.g., discomfort and anxiety) when performance evaluation uncertainty is high, and the desire to reduce these negative feelings leads them to impulsively misreport their performance. This paper highlights the emotion-driven aspect of performance misreporting and demonstrates that misreporting is shaped not only by individual traits but also by supervisor's behavior and broader organizational and environmental factors that contribute to performance evaluation uncertainty.
Focusing on Italian accountants (Commercialisti), who are usually professionals working alone or in small firms, we examine how small practitioners experience and navigate the dynamics between professionalism and commercialism. Drawing on empirical material from roundtable meetings and interviews with Commercialisti, and using a framework that examines how culturally patterned dispositions shape their experiences of field and capital conversion dynamics, we explore how these professionals engage reflexively with concerns about recognition. Our analysis shows how reflexive engagement with field positioning amidst tensions between professionalism and commercialism is tied to small practitioners' concerns about recognition, stemming from experiences of ‘failed capital conversions’. We unpack these concerns through Commercialisti's reflections on their quest for ‘fair compensation’, which functions for them as recognition that matters not only for economic survival but also for sustaining their position in a symbolic hierarchy dominated by large firms and prestigious peers. In doing so, we demonstrate how Commercialisti's concerns about fair compensation, while economic in form, are deeply symbolic in function and how reflexivity plays an ambivalent role in such pursuits of recognition. While reflexivity enhances awareness of lacking status and power and triggers aspirations to address these constraints, it simultaneously heightens frustration about the structural and symbolic conditions that limit the feasibility of such strategies. This ambivalence produces a ‘reflexive impasse’ at the intersection of hierarchical nostalgia and fatalist resignation, leaving Commercialisti caught between attachment to institutionalized norms and a prevailing sense that change is unattainable, which stalls identity transformation despite ongoing efforts to reclaim recognition.
