The Effects of Communication of Causal Linkages and Incentives on Employees’ Construal Level Mindsets
SHI, BEI
Citations
Abstract
This study investigates how two management controls, communication of the causal linkages between employees’ current actions and future outcomes and incentives that tie employees’ future-period compensation to their current actions, affect employees’ construal level mindsets. A construal level mindset refers to the abstractness of an individual’s mental representation of an object, event, or action. A high-level construal has been shown to benefit various types of decisions and behaviors, such as creative performance, negotiation, and knowledge transfer. Using an experiment, I find that communication of the causal linkages increases employees’ construal levels regardless of whether incentives tie employees’ future-period compensation to their current actions. The findings suggest that firms can use the communication of the causal linkages, a relatively low-cost management control compared with incentives, to capitalize on the various decisional and behavioral benefits of high-level construal mindsets.