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Does Motivational Orientation Impact the Effectiveness of Incentive Contracts

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ABSTRACT: Research in psychology has identified that individuals have two distinct neurologically based motivational systems. One system is the behavioral activation system (BAS), which activates individual motivation in response to… Click to show full abstract

ABSTRACT: Research in psychology has identified that individuals have two distinct neurologically based motivational systems. One system is the behavioral activation system (BAS), which activates individual motivation in response to signals of reward in order to “achieve success.” The second system is the behavioral inhibition system (BIS), which activates motivation in response to signals of goal conflict in order to “avoid failure.” We predict and find that a stronger, rather than weaker, BIS attenuates the positive effect of sensitive performance measures on performance. In contrast, the BAS does not moderate the effect of performance measure sensitivity on performance.

Keywords: system; effectiveness incentive; motivational orientation; impact effectiveness; performance; orientation impact

Journal Title: Journal of Management Accounting Research
Year Published: 2017

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