Abstract
Purpose – This research aims to verify if perception s of organizational justice in incentive contracts have a positive effect on the congruence between personal and organizational objectives in companies with decentralized structures . Design/methodology/approach – The research is quantitative . W e used a questionnaire as the form of data collection. The instrument consists of 39 statements to test the theoretical hypotheses through structural equation modeling . The acces sibility sample consisted of 140 managers of Brazilian companies. Findings – The results indicate that: (a) multiple performance measures increase the perception of d istributive and p rocedural j ustice; (b) quality feedback leads to the understanding that incentive contracts are fair; (c) disregarding uncontrollable aspects by managers in performance evaluation s does not lead to the perception of p rocedural and d istributive j ustice; (d) p erception s of organizational justice have a positive effect on the congruence between personal and organizational goals. Originality/value – I n addition to contributing to the advancement of knowledge in the managerial area, t he findings of this research may support policies for the formulation of incentive contracts in Brazilian companies with decentralized structures , and this aspect represents a business and practical contribution for company managers and owners.
Highlights
The study aims to verify if perceptions of organizational justice in incentive contracts have a positive effect on the congruence between personal and organizational goals in organizations with a decentralized structure
Evaluate if trustees’ perceptions of organizational justice in incentive contracts are associated with congruence between personal and organizational goals in structurally decentralized companies, the Source: elaborated by the author survey instrument, sampling and data collection, In addition to these 34 statements, three control questions were included to check if the respondents were holding or had previously held management positions, if they were familiar to the practices of incentive contracts, and if they acted in decentralized, hierarchically-structured organizations, with the delegation of power and establishment of responsibilities
It is assumed that the respondents who hold management positions in a corporative environment with such features meet all the viability requirements of the study, since they allow the establishment of incentive contracts among agents to be checked, such as performance measurements linked to such incentives, and what the perception is of organizational justice among those trustees
Summary
The study aims to verify if perceptions of organizational justice in incentive contracts have a positive effect on the congruence between personal and organizational goals in organizations with a decentralized structure. The investigation envisages that higher levels of perceptions of organizational justice in incentive contracts might be associated with a greater alignment between personal and organizational goals, motivating managers to act more consistently as regards to the company’s interests. Jensen and Meckling (1976) and Easterbrook (1984), among others, describe the agency relationship as both explicit and implicit contracts in which the principal concedes decision-making power to the agent to perform services. In these contracts, it is assumed that the principal will give control of the company to agents with more expertise in the business. In exchange for this, the agents will be rewarded with both financial and non-financial goods
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