Tatiana Sandino

Effects of an Information Sharing System on Employee Creativity, Engagement, and Performance

Many service organizations empower frontline employees to experiment with different ways to meet diverse customer needs across different locations. We propose a field experiment in a retail chain to test the effects of an information sharing system recording employees’ creative work— a control system often used to promote local experimentation—on the quality of creative work, employee engagement, and financial performance. These systems have the potential to enhance employee creativity (e.g., by exposing employees to a broad pool of ideas) and job engagement (e.g., by increasing the impact and accountability of their work). However, they could also reduce local experimentation if employees exhibited free riding behavior, relying on copying the ideas of others rather than producing their own. The findings of our study will shed light on how information sharing systems can affect the quality and performance consequences of employees’ creative work. * Corresponding author’s contact information: Morgan Hall 367, Harvard Business School, Boston MA 02163 E-mail: tsandino@hbs.edu Phone: (617) 495-0625 We thank the mobile phone retail company that agreed to collaborate with us on this field experiment for supporting us with the development of this proposal and for their commitment to this project. All errors are our own.

Compensation Consultants and the Level, Composition and Complexity of CEO Pay

We provide fresh evidence regarding the relation between compensation consultants and CEO pay. First, firms that employ consultants have higher-paid CEOs—this result is robust to firm fixed-effects and matching on economic and governance variables. Second, while this relation is partly due to consultant conflicts of interest, it is largely explained by the impact consultants have on the composition and complexity of CEO pay plans; notably, this impact fully mediates the consultant-CEO pay relation. Third, firms with higher-paid CEOs and more complex pay plans are more likely to hire a consultant. Lastly, say-on-pay voting patterns suggest shareholders view positively the advice consultants provide but only when consultants do not provide other services. We also find suggestive evidence of boards “layering�? new equity incentive plans over existing ones, thereby increasing the impact of composition and complexity on CEO pay beyond the premium the CEO would demand for bearing additional compensation risk.

Who Should Select New Employees, the Head Office or the Unit Manager? Consequences of Centralizing Hiring at a Retail Chain

We examine how changing the allocation of hiring decision rights in a multiunit organization affects employee-firm match quality, contingent on a unit’s circumstances. Our research site, a US retail chain, switched from a decentralized hiring model (hiring by business unit managers—in our case, store managers) to centralized hiring (in this study, by the head office). While centralized hiring can ensure that enough resources are invested in hiring people aligned with company values, it can also neglect the unit managers’ local knowledge. Using difference-in-differences analyses, we find that the switch is associated with relatively higher employee departure rates and thus poorer matches if the business unit manager has a local advantage; that is, if the store serves repeat customers, serves a demographically atypical market, or poses higher information-gathering costs for headquarters. In these cases, the unit manager may be more informed than headquarters about which candidates best match local conditions.

Tournament Incentive Plans Incorporating Objective and Subjective Criteria: Implications for a Geographically Dispersed Organization

Using data from a retail chain, this paper studies the effects of a preferential plan providing incentives only to exemplary employees. Such plans incorporate elements of tournaments (through the selection of employees chosen largely on the basis of past performance but incorporating some managerial discretion) and linear incentives to align employees with company goals and values. We find that, on average, the implementation of the preferential incentive plan was associated with improvements in sales. Also, we find that this plan was associated with greater improvements in sales and gross profits, and reductions in the incidence of bad audits in stores where employees were initially less likely to be aligned with company goals. However, the plan was associated with lower sales and gross profits, and higher incidence of bad audits, absenteeism, and turnover in some situations where employees could have perceived the plan to be unattainable or unfair. Our study sheds light on the impact of preferential incentive plans, and the conditions under which these plans are more or less effective.Using data from a retail chain, this paper studies the effects of a preferential plan providing incentives only to exemplary employees. Such plans incorporate elements of tournaments (through the selection of employees chosen largely on the basis of past performance but incorporating some managerial discretion) and linear incentives to align employees with company goals and values. We find that, on average, the implementation of the preferential incentive plan was associated with improvements in sales. Also, we find that this plan was associated with greater improvements in sales and gross profits, and reductions in the incidence of bad audits in stores where employees were initially less likely to be aligned with company goals. However, the plan was associated with lower sales and gross profits, and higher incidence of bad audits, absenteeism, and turnover in some situations where employees could have perceived the plan to be unattainable or unfair. Our study sheds light on the impact of preferential incentive plans, and the conditions under which these plans are more or less effective.