Accounting & Management
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- Spring 2023
- Article
Incentive Contract Design and Employee-Initiated Innovation: Evidence from the Field
By: Wei Cai, Susanna Gallani and Jee-Eun ShinThis study examines how the design of incentive contracts for tasks defined as workers’ official responsibilities (i.e., standard tasks) influences workers’ propensity to engage in employee-initiated innovation (EII). EII corresponds to innovation activities that are not formally assigned to workers but are nonetheless encouraged and considered important for the company's success. We leverage field data obtained from a manufacturing company that uses a dedicated information system to track workers’ EII idea submissions. We find theory-consistent evidence that, compared to workers receiving fixed pay, employees rewarded for their standard tasks with variable compensation contracts exhibit a lower propensity to engage in EII. This result is particularly evident when we consider innovation ideas narrowly focused on the standard task (i.e., narrow-scope ideas) versus ideas benefiting other constituents and activities beyond the proponents’ standard task (i.e., broad-scope ideas). Our findings suggest that variable pay narrows employees’ conceptual focus around the standard task and hinders employee engagement in broad-scope innovation activities compared to fixed compensation contracts. We contribute to the nascent literature on incentives for employee-initiated innovation and to the growing stream of research examining the determinants of different types of innovation.
- Spring 2023
- Article
Incentive Contract Design and Employee-Initiated Innovation: Evidence from the Field
By: Wei Cai, Susanna Gallani and Jee-Eun ShinThis study examines how the design of incentive contracts for tasks defined as workers’ official responsibilities (i.e., standard tasks) influences workers’ propensity to engage in employee-initiated innovation (EII). EII corresponds to innovation activities that are not formally assigned to workers but are nonetheless encouraged and considered...
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- March 2023
- Case
Ownership Works: Scaling a Profitable Social Mission
By: Ethan Rouen, Dennis Campbell and Andrew Robinson- March 2023
- Case
Ownership Works: Scaling a Profitable Social Mission
By: Ethan Rouen, Dennis Campbell and Andrew Robinson -
- March 20, 2023
- Editorial
Can Twitter Be a Force for Good? Social Media Helps Curb Corporate Misconduct
By: Jonas Heese and Joseph Pacelli- March 20, 2023
- Editorial
Can Twitter Be a Force for Good? Social Media Helps Curb Corporate Misconduct
By: Jonas Heese and Joseph Pacelli
About the Unit
The Accounting & Management unit at Harvard Business School strives to be the worldwide leader in research, course development, and teaching on top managements' use of performance measurement systems to:
- Communicate with external investors to ensure that their firms' securities are fairly priced and that they are able to access capital,
- Measure and evaluate their firms' economic performance,
- Improve resource allocation and strategy implementation within their firms, and
- Build accountability for performance through effective external and internal governance.
Unit research, course development, and teaching fall into two broad areas: Financial Reporting and Analysis and Management Accounting. Our research helps scholars and educators understand current best practices for the design and use of performance measurement systems that help managers to build more effective, value-creating organizations. Our teaching materials enable us to bring the results of this research into the classroom, and to practice.
Recent Publications
Incentive Contract Design and Employee-Initiated Innovation: Evidence from the Field
- Spring 2023 |
- Article |
- Contemporary Accounting Research
Ownership Works: Scaling a Profitable Social Mission
- March 2023 |
- Case |
- Faculty Research
Can Twitter Be a Force for Good? Social Media Helps Curb Corporate Misconduct
- March 20, 2023 |
- Editorial |
- Promarket
Emory Healthcare on the Front Lines of the Nursing Workforce Crisis
- March 2023 |
- Case |
- Faculty Research
Hikma Pharmaceuticals Governance Journey
- March 2023 |
- Teaching Note |
- Faculty Research
Sustainability Reporting at Dollar Tree, Inc.
- March 2023 |
- Teaching Note |
- Faculty Research
Northvolt: Building Batteries to Fight Climate Change
- March 2023 |
- Teaching Note |
- Faculty Research
Ransomware at Springhill Medical Center
- March 2023 |
- Teaching Note |
- Faculty Research