University of Oulu

Moilanen, S. and Ikäheimo, S. (2019), "Managerial intentions for and employee perceptions of group-based incentives : Social exchange theory-based interpretations", Journal of Accounting & Organizational Change, Vol. 15 No. 4, pp. 605-625.

Managerial intentions for and employee perceptions of group-based incentives : social exchange theory-based interpretations

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Author: Moilanen, Sinikka1; Ikäheimo, Seppo2
Organizations: 1Department of Accounting, University of Oulu, Oulu, Finland
2Department of Accountancy, Aalto University Business School, Aalto, Finland
Format: article
Version: accepted version
Access: open
Online Access: PDF Full Text (PDF, 0.4 MB)
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Language: English
Published: Emerald, 2019
Publish Date: 2019-11-29


Purpose: This paper aims to interpret and compare managerial intentions for and employee perceptions of group-based incentive systems.

Design/methodology/approach: The data comprise interviews with managers and employees in four Finnish firms with experience of company-wide incentive systems involving profit-sharing and team-based rewards. Benefitting from social exchange theory, managers’ intentions and employees’ perceptions are examined.

Findings: Managers’ and employees’ views resemble each other concerning profit-sharing as reflecting reciprocity rooted in perceived distributive fairness, whereas examination of the team-based rewards revealed impediments in reciprocity. While managerial intentions for team-based rewards refer to social exchange with economic intensity via selection of controllable performance measurements aimed at making individual-level effort count, the employees’ perceptions deem such metrics non-controllable, reflecting perceived distributive and procedural unfairness.

Practical implications: Profit-sharing seems to create fair social obligation and goal congruence between managers and employees, whereas team-based incentives easily suffer from unfairness, reducing their effectiveness.

Originality/value: Distinguishing between managerial intentions and employee perceptions pertaining to incentive systems facilitated in-depth exploration of the social exchange inherent in them, conceptualized in terms of economic intensity, fairness and controllability. With this lens, qualitative analysis revealed differences in interpretations of controllability and fairness between the managerial intentions and employee perceptions. The central contribution to scholarship takes the form of interpretations reflecting upon these key findings.

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Series: Journal of accounting & organisational change
ISSN: 1832-5912
ISSN-E: 1839-5473
ISSN-L: 1832-5912
Volume: 15
Issue: 4
Pages: 605 - 625
DOI: 10.1108/JAOC-04-2019-0043
Type of Publication: A1 Journal article – refereed
Field of Science: 512 Business and management
Copyright information: © 2019, Emerald Publishing Limited. The final authenticated version is available online at: