The Effect of Narcissism and Contract Frame on Employee Performance in the Presence of an Ex Ante Target

Document Type

Article

Publication Date

Spring 2025

Publisher

American Accounting Association

Source Publication

Journal of Management Accounting Research

Source ISSN

1049-2127

Original Item ID

DOI: 10.2308/JMAR-2023-045

Abstract

Incentive contracts containing ex ante targets are prevalent in organizations. Although prior research indicates that contract frame has no significant impact on employee performance when an ex ante target is assigned, we provide a more nuanced view by examining the role of narcissism in this relationship. Results indicate when an ex ante target is assigned, less narcissistic employees perform better than more narcissistic employees regardless of contract frame. In addition, target difficulty plays a role. When narcissism is lower, employees working under a less difficult target perform better than those working under a more difficult target, but there is no effect of contract frame. When narcissism is higher, we find an interaction between contract frame and target difficulty. When the target is less difficult, employees higher in narcissism perform better under the penalty than the bonus contract frame, whereas the opposite is the case when the target is more difficult.

Comments

Journal of Management Accounting Research, Vol. 37, No. 1 (Spring 2025): 167-183. DOI.

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