Does granting managerial autonomy in exchange for accountability mitigate gaming?

Abstract

AbstractTo improve organizational performance, the doctrine of performance management states that managers need to be granted autonomy in exchange for accountability for results. However, managers are often held accountable without autonomy in practice. The accountability pressure often causes gaming behaviors. How does granting managerial autonomy in exchange for accountability affect gaming behaviors? To address this question, we investigated how a performance management reform in New York City public schools, the Empowerment Zone, affected two types of gaming behaviors: effort substitution and cream skimming. Utilizing a difference‐in‐differences estimation strategy over multiple periods, we find that the Empowerment Zone experiment mitigates effort substitution and cream skimming in public schools, but the effect is modified by organizational resources. The findings show the potential of fully implementing performance management doctrine in mitigating gaming and suggest that human resources are crucial for realizing the potential.