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75A Multi-Modality Approach to Examine Reward Satisfaction amongst Mid-Level
Managers*
Alvise FAVOTTO
School of Social and Political Sciences, University of Glasgow, UK [email protected]
Georgios KOMINIS
Adam Smith Business School, University of Glasgow, UK [email protected]
Clive R. EMMANUEL
Adam Smith Business School, University of Glasgow, UK
Abstract. Limited research addresses the perceptions of mid-Level managers as recipients of desirable rewards. In contrast to CEO "tailor-made" compensation schemes, mid-level manager reward schemes are treated as homogeneously acceptable to motivate individuals. However, in large corporations, mid-level managers are organized in several echelons where size of business unit, functions or geographic locations create an organizational hierarchy. Data from 1,771 mid-level managers across five echelons in a single company are analysed to discover reward satisfaction employing instrumental, affective and cognitive modalities (Elizur, 1984). Our findings reveal systematic patterns in satisfaction with different rewards across managers from different organisational echelons. Significant differences in managerial perceptions are identified for satisfaction with work conditions and pay (instrumental modality), relations with co-workers, superior managers and direct supervisors, supervisory behaviour, recognition and esteem (affective modality), and opportunities for authority/responsibility, personal growth, use of ability and knowledge, job interest, meaningfulness of work and pride to work for the organization (cognitive modality). All in all, the multi-modality approach adopted in this study appears effective in identifying echelons of managers for which different rewards have different perceived value and therefore different motivational force. With this extended approach to capturing reward satisfaction, patterns of desirable incentives emerge that can help specify the design of schemes for mid-level managers.
Аннотация. Немного исследований посвящены тому, как менеджеры среднего звена воспринимают вознаграждения. В отличие от индивидуально «настроенных» компенсационных пакетов генеральных директоров предприятий, считается, что схемы вознаграждения менеджеров среднего звена приемлемы в равной степени для мотивации всех сотрудников. Однако в крупных корпорациях менеджеры среднего звена подразделяются на несколько эшелонов, в которых размер бизнес-единицы, функции или географическое расположение определяют создание собственной организационной иерархии. Наши результаты раскрывают систематические закономерности в удовлетворенности различными видами вознаграждений среди менеджеров из разных организационных эшелонов. Найдены значительные различия в восприятии менеджерами удовлетворенности условиями труда и заработной платы (инструментальная модальность), отношений с коллегами, менеджерами более высокого уровня и прямыми руководителями, признания и уважения (эмоциональная модальность), факторов власти, ответственности, личного роста, использования способностей и знаний, интереса к работе, значимости работы, гордости от работы на данном предприятий (когнитивная модальность). В целом многомодальный подход, примененный в этом исследовании, показал свою эффективность в выявлении эшелонов менеджеров, для которых ценность различных вознаграждений воспринимается по-разному и, следовательно, имеет различную силу мотивации. При таком расширенном подходе к определению удовлетворенности вознаграждением возникают модели стимулирования, которые помогают оптимизировать схемы вознаграждения менеджеров среднего звена.
Key words: mid-level management, organizational level, reward system design, reward satisfaction.
* Многомодальный подход к анализу удовлетворенности вознаграждениями среди менеджеров среднего звена.
1. INTRODUCTION
Management control systems (MCS) are intended to provide motivation for organizational members to take actions and make decisions that will accomplish the organization's objectives (Merchant and Van der Stede, 2012). Since the pivotal works of Hopwood (1974) and Otley (1987), researchers in management accounting have acknowledged that reward systems are one of the main mechanisms through which an organization can persuade managers to exert themselves toward organizational goals (Emmanuel et al., 1990). When direct control is hindered by the distance between supervisors and mid-level managers who have access to more relevant and up-to-date decision information, reward schemes are essential to achieve goal congruence (Merchant, 1989). In such contexts, motivational contracts (that is, written and unwritten promises of rewards for the attainment of pre-set performance results) are intended to bridge the a priori conflict of interests between managers and the organization itself. In this respect, the significance of rewards for management control purposes has been recently reaffirmed (Otley, 1999; Malmi and Brown, 2008; Ferreira and Otley, 2009).
This study relates to prior research that investigates the design and impact of reward systems for mid-level managers. Management control scholars have long recognized that managers who are highly motivated are more likely to be high performers (Ferris, 1977; Rockness, 1977; Brownell and McInnes, 1986). This is in line with a well-established stream of organizational behaviour literature (Lawler and Porter, 1967a; Porter and Lawler, 1968). At the same time, empirical studies based on expectancy-valence theory consistently demonstrate that different types of rewards contribute to increase managers' work motivation (Ronen and Livingstone, 1975; Jiambalvo, 1979; Kominis and Emmanuel, 2007). Merchant (1989) adds another relevant dimension to the provision of rewards to mid-level managers. He argues that the ideal motivational contract for these managers should offer rewards that are desirable to recipients. It follows that effective reward system design should take into account the rewarded manager's perspective in order to determine patterns of preferences for different types of inducements. Provision of a more satisfactory set of rewards, in turn, is likely to affect managers' performance positively. However, much of the literature in management control takes the standpoint of incentive scheme designers (Merchant and Otley, 2007), while substantially "... disregarding how managers effectively react to rewards' provision within performance evaluation schemes" (Ahn et al., 2010, p. 390). To date, little is known about the desirable design features of reward
systems for mid-level managers in practice (Uyter-hoeven, 1972; Ehrenberg and Milkovich, 1987; Fisher, 1992). A body of literature explores the performance measures that are employed in the bonus contracts (Bushman et al., 1995; Keating, 1997; Abernethy et al., 2004; Bouwens and van Lent, 2007; Abernethy et al., 2010). Another stream of research examines the link between delegation and compensation choices for business unit managers (Baiman et al., 1995; Nagar, 2002). However, only a limited number of studies investigate how middle level managers actually perceive different elements of the reward systems they are offered (Vancil, 1979; Kominis and Emmanuel, 2007).
The work of Merchant (1985; 1989) suggests that different groups of individuals may react differently to the provision of the same reward. Satisfaction with different rewards may vary across groups of managers according to contextual characteristics or individual needs and preferences (Lawler and Porter, 1967b; Campbell et al., 1970; Lawler, 1994). Prior research in management accounting mainly concentrates on compensation schemes for executives, suggesting that executive incentive schemes should be "tailor-made" in order to enhance their motivational impact (Pavlik et al., 1993; Murphy, 1999). Perhaps more importantly, reward choices reflect the hierarchical stratification of executives with implications for management control system designs (Widener, 2006). Instead, reward preferences of mid-level managers are assumed to be essentially homogeneous (Bourguignon, 2004). In large corporations, mid-level managers are organized in several echelons according to business unit, functions or geographic locations, creating an organizational hierarchy, therefore the design of appropriate incentive schemes may be hampered by the layering of agency problems down the echelons of the organization (Baker et al., 1988; Indjejikian, 1999). The resultant adoption of a "one-size fits all" reward approach for mid-level managers is questionable (Lawler, 2000).
Additionally, much of extant research in management accounting focuses only on a subset of the reward system elements potentially desirable to organizational members (Ittner and Larcker, 2001; Malmi and Brown, 2008). Reward systems can encompass both financial and non-financial components, but the traditional approach of this stream of research concentrates exclusively on financial inducements only (Kunz and Pfaff, 2002). Merchant et al. (2003) note that much of organizational incentive research disregards the role of an array of intangible rewards such as recognition, autonomy or supervisory support as those are difficult to measure and to evaluate. It can be argued that these difficulties are a consequence of the theoretical perspective employed by manage-
ment accounting researchers in order to investigate the construct of work outcomes (Kunz and Pfaff, 2002). So far, the literature addressing a broader spectrum of rewards relies predominantly on the extrinsic/intrinsic reward dichotomy, both in theoretical contributions (Ansari, 1977; Flamholtz et al., 1985; Malmi and Brown, 2008) and in empirical studies (Ferris, 1977; Rockness, 1977; Kominis and Emmanuel, 2007). However, the construct validity of this dichotomy has been called into question by some commentators suggesting that it may be inadequate to gauge the multidimensionality of the reward construct in real organizational settings (Broedling, 1977; Guzzo, 1979; Elizur, 1984; Kunz and Pfaff, 2002). In practice, individuals are likely to fail to unambiguously categorize rewards based on this definitional distinction (Dyer and Parker, 1975; Kanungo and Hartwick, 1987). In management control literature, the influence of extrinsic inducements on work behaviour is seen to be qualitatively different compared with that of intrinsic rewards (Flamholtz et al., 1985). It follows that the unequivocal capability to distinguish between different forms of rewards becomes critical for the study of the design of desirable reward schemes and their effect on managers in organisations.
An alternative approach to work outcomes (Elizur, 1984), as perceived by mid-level managers, identifies instrumental, affective and cognitive modalities. This more comprehensive conceptualization aims to capture a range of work values that extends the extrinsic/ intrinsic dichotomy in order that differences and similarities of desirable rewards can be more accurately gauged. We intend to examine mid-level manager satisfaction of rewards using this extended identification.
This perception-based research examines whether reward satisfaction varies across different layers of the mid-level management hierarchy. Evidence from a multinational company operating in the service sector are provided by examining the perceptions of 1,771 mid-level managers collected and analysed through a survey instrument in 2009. The aim is to detect patterns of reward satisfaction by hierarchical position in the organization. At the same time, this study represents the first attempt to provide a more comprehensive picture of the array of rewards perceived as potentially desirable by mid-level managers by using the "modality" of the reward construct elaborated by Elizur, (1984) and Elizur et al. (1991). By this means, the possibility of a more flexible reward scheme that can gain acceptance across echelons of mid-level managers is uncovered.
The remainder of the paper is structured as follows. The next section provides a discussion of our theoretical background, while in the third section we review the relevant theoretical and empirical research in the area of reward satisfaction for mid-level managers
with the derived hypotheses. Section four presents the research setting and the data for this study. Empirical tests and results are reported in section five with a concluding discussion presented in section six.
2. THEORETICAL BACKGROuND
Desirable rewards are heterogeneous by nature, ranging from expressions of recognition by supervisors and senior managers, through provision of autonomy in decision-making, to financial rewards and promotion (Merchant et al., 2003). The dominant construct of extrinsic/intrinsic in management control is questionable and calls for a more comprehensive approach to identifying rewards have been made (Kunz and Pfaff, 2002; Ferreira and Otley, 2009). Viewing reward schemes as the provision of financial incentives alone is partial and incomplete since the design of reward systems that encompass non-financial inducements has been extensively documented (Merchant, 1989; Ezzamel and Willmot, 1998).
Attempts to operationalize the extrinsic/intrinsic dichotomy have generated a plethora of alternative notions of these constructs, none, however, seems to offer a clear differentiation (Guzzo, 1979). As a consequence, studies adopting the extrinsic/intrinsic paradigm have somewhat arbitrarily collapsed work outcomes such as supervisory support or feelings of esteem and recognition, to either of these two categories, leading to inconsistent classifications, which have subsequently led to confounding results. For reward scheme designers, independent assessment of rewards within an organization using an unequivocal classifi-catory scheme becomes necessary, since distinctive design choices need to be made according to the type of rewards the organization intends to offer to managers (Ansari, 1977).
An alternative conceptualization of the reward construct may be needed to allow a broader and more accurate approach to reward recognition. A multifaceted approach to work values provides the main theoretical basis for the research reported here (Elizur, 1984; Elizur et al., 1991). Elizur (1984) conceptually established and tested a structure for the construct of work values based on two independent facets: the modality of work outcomes and the relation with task performance. Independence of facets (Elizur, 1984) allows us to focus this research on the first facet, that is, the modality of work outcomes. Desirable work outcomes for managers are classified into: instrumental-material, affective-social, or cognitive-psychological (Elizur, 1984; Elizur and Sagie, 1999). Under the first classification, outcomes relate to material aspects of work, including pay, benefits and work conditions. The sec-
ond modality pertains to interpersonal relations and social features of work, such as feelings of esteem as a person, recognition for performance and relations with colleagues and supervisors. Finally, the cognitive modality encompasses several psychological aspects associated with the work itself, such as interest, responsibility, or a sense of achievement.
Using this multi-modality framework, identification of an assortment of desirable work outcomes grounded conceptually on five content theories of work motivation informs this study (Elizur et al., 1991). Content theories of motivation concentrate on "the specific identity of what it is within an individual or his environment that energizes and sustain behaviour". Therefore, these perspectives attempt to define specific entities within a general class of variables such as work rewards (Campbell et al., 1970). The assumption is that people will behave in ways that they think will satisfy their underlying needs and motives. Instrumental outcomes are derived from the works of Maslow (1954), Herzberg (1966), and Alderfer (1972). Affective and cognitive modalities draw on these three theories and a further selection of outcomes based on McClelland (1961) and Hackman and Oldham (1980). There is a common thread linking the five content theories adapted from the work of Elizur. Lower-order needs correspond to existence and affiliation or relatedness needs and to hygiene factors (including pay). Higherorder needs relate to growth and achievement needs, and to the job content factors identified by Herzberg, Hackman, and Oldham. Even though content theories appear to share some common shortcomings, they appear appropriate to address the use of managerial policies in handling issues relating to control systems and human resources, since they are concerned with motivational aspects of groups of individuals (Shields, 2007).
Drawing on content perspectives, Elizur (1984) identifies a set 21 valuable work outcomes, that are later extended to encompass 24 outcomes (Elizur et al., 1991). Pay, hours of work, security, benefits and work conditions are classified as instrumental. Relations with supervisors, co-workers, recognition, esteem and opportunity to interact with people are categorized as affective, while responsibility, use of ability, advancement, achievement, influence, interest, feedback, meaningful work, independence, pride to work for the company, status and contribution to society are classed as cognitive.
Structural correspondence between the proposed approach and some existing extrinsic/intrinsic classification was established both theoretically and empirically by Borg (1990). Intrinsic outcomes are included in the cognitive modality, whereas extrinsic rewards are either instrumental or affective, however the mo-
dality facet allows reconciliation of the ambiguous classification of certain outcomes within the extrinsic/ intrinsic dichotomy. Thus, it appears to be more gen-eralizable as demonstrated by further validation in different national and cultural settings (Borg, 1986; Elizur et al., 1991) and with reference to different groups of organizational members (Elizur and Sagie, 1999). In addition, the proposed structure expands the array of potentially desirable rewards, reducing the risk that important outcomes are overlooked. For these reasons, the multi-modality approach is employed in this study to investigate the relationship between preferences for different work outcomes and relevant personal and organizational characteristics.
3. RELEVANT LITERATURE AND HYPOTHESES
The development of motivational contracts that are capable of directing mid-level managers' effort and behaviour towards organizational objectives entails the identification of those work outcomes that are more desirable to recipients (Merchant, 1989). When reward packages are to be tailored, organizations assume a diagnostic stance with respect to their members' rewards preferences, selecting a set of rewards that is perceived as desirable and structuring the reward scheme accordingly (Lawler, 1994). If the perceived desirability of rewards is overlooked, the reward scheme is unlikely to contribute to motivation (Merchant and Van der Stede, 2012). Should the organization develop reward packages that concentrate on areas of less importance to managers, the efficiency of the reward scheme is compromised and reduces managerial effort.
When organizations make decisions about which MCS and reward schemes to adopt, their choices typically reflect the values and the preference of those in charge of designing those control systems. There is, however, little guarantee that those choices are similarly valued by all managers subject to such systems, as demonstrated in previous studies in the performance measurement and incentive compensation areas (Shields and White, 2004; Bento and White, 2006). Such discrepancies between the rewards effectively desired by organizational members and those top-management considers desirable and includes in the company's reward package become a distinct possibility.
The work motivation literature provides rationales for differences in reward perception by exploring the importance of human needs or motives relative to the design and implementation of reward schemes. According to the content perspective of motivation (Ma-slow, 1954; McClelland, 1961), reward effectiveness strongly depends on whether the reward is valued and desirable to the recipient. As Lawler (1994) points out,
large differences among groups of individuals exist in the importance assigned to different work outcomes as need-satisfiers. These differences relate in meaningful ways to a number organizational factors, most notably management level. Organizational level is found to be associated with reward level, reward satisfaction, and managerial perceptions of the satisfaction with rewards relative to those of subordinates and superiors (Porter and Lawler, 1965).
3.1. instrumental outcomes
Content theories of work motivation postulate that individuals at different levels in the organisational hierarchy are driven by different needs. Those in higher positions are more likely to be motivated by higher order needs, whereas those in lower situations tend to be more concerned with the satisfaction of lower order needs, such as physical or security needs (Porter, 1961, 1962, 1963; Slocum, 1971). This is consistent with the notion of a hierarchical order of prepotency according to which higher-order needs become important only after the lower-order needs have been satisfied.
The provision of instrumental rewards, such as pecuniary inducements, perquisites, and favourable work conditions, are generally associated with the satisfaction of the latter group of needs (Porter, 1961). It is argued that as individuals attain lower-order extrinsic rewards, the importance attached to and the motivational impact of such rewards tend to decrease (Porter and Lawler, 1965; Herman and Hulin, 1972, 1973). Individuals in higher-level positions consistently appear to report a higher level of perceived gratification with instrumental rewards than managers at lower organizational levels (Rosen and Weaver, 1960). This is even more visible when pecuniary inducements are considered (Lawler and Porter, 1963, 1966). Similar studies based on the motivation/hygiene perspective suggested by Herzberg et al. (1959) find that instrumental outcomes, such as pay and work conditions are of major concern for individuals at lower echelons in the company (e.g., Lahiri and Srivastva, 1967).
Mid-level managers comprise a potentially diverse group, although each may have subordinates reporting to him/her and responsibility for a clearly delineated sub-unit or function within the organization. Within mid-level management, the size of sub-unit and level of responsibility varies making it necessary to identify different echelons. The higher echelon of mid-level managers expect to be provided with higher instrumental rewards and to be more satisfied with those rewards compared with their lower echelon counterparts for whom lower level needs appear to be more urgent (Porter and Lawler, 1965). Departing from
Maslow's need-hierarchy concept, Herman and Hulin (1972; 1973) demonstrate that different groups of mid-level managers from a single organizational setting are significantly different in their perception of pay and benefits with higher-level managers being comparatively more satisfied with instrumental rewards in comparison with lower echelon managers and first line supervisors. In a similar vein, Rosen (1961) surveyed satisfaction with a number of work outcomes — except monetary inducements — reported by managers from four echelons in a single plant. Significant differences among managers at different organizational levels are found for a number of items connected with work conditions and organization of work.
The above discussion leads us to propose the following hypothesis (stated in the null form):
H1: There is no association between hierarchical level in the organization and level of satisfaction with instrumental outcomes.
Consistent with Elizur et al. (1991) instrumental outcomes encompass: (a) pay, (b) work conditions, (c) convenient hours of work and (d) benefits.
3.2. affective outcomes
The conceptualization of work outcomes has become more differentiated over time and more specific dimensions of the rewards of work have emerged. Some researchers identify a number of affective elements that are generated by the interaction with other individuals in the workplace (Katz and Van Maanen, 1977; Mottaz, 1985). Others distinguish intrinsic rewards from altruistic and social concomitants (Rosenberg, 1957; Pryor, 1987). Affective outcomes are of concern in the design of the reward system, especially for managers at the mid-level, since the effective enactment of their role appears to be mediated by their socialization process in the organization (Vancil, 1979; Gomez-Mejia et al., 1985). Proponents of content theories of work motivation conceive affective outcomes as lower-order needs' satisfiers (Maslow, 1954; McClelland, 1961; Alderfer, 1972). Borg (1990) illustrates the substantial correspondence between the affective modality identified by Elizur (1984), Alderfer's relatedness and Maslow's esteem and affiliation needs.
Extant research does not provide, however, a uni-vocal proposition as to the relationship between perception of affective outcomes and managers' level in the organization. The perception of some affective outcomes, such as relations with peers and opportunities to help others while at work, seems not to be influenced by the hierarchical level of managers (Porter, 1962; Porter and Lawler, 1964). On the other hand, the perceived importance of esteem and recognition
obtained for doing a good job varies depending on the hierarchical level of the individual. For example, there is evidence to suggest that hierarchical ascent is characterized by greater recognition that contributes to individual satisfaction (Porter, 1962; Porter and Lawler, 1964; Rinehart et al., 1969; Slocum, 1971). Lower echelon managers and first-line supervisors may feel that the disapproval of relevant-others in the company for their results jeopardizes their opportunity to stay with or advance within the firm. The need to obtain recognition for work done, compared with managers at higher levels who are in more established positions becomes a more pressing need and presumably a more powerful motivator. Similarly, relations with superiors are perceived differently by managers at different echelons (Rosen and Weaver, 1960; Rosen, 1961; Saleh et al., 1975), possibly as a consequence of differences in tasks and responsibility of managers and different styles of leadership (Gomez-Mejia et al., 1985).
The above leads to the following hypothesis (stated in the null form):
H2: There is no association between hierarchical level in the organization and level of satisfaction with affective outcomes.
Consistent with Elizur et al. (1991) affective outcomes encompass: (a) relations with co-workers, (b) opportunity to interact with people at work, (c) supervisory support, (d) recognition, (e) esteem.
3.3. cognitive outcomes
Higher-order needs are likely to emerge when satisfaction of lower-order needs is achieved by individuals (Maslow, 1954). Managers at different organizational levels are found to attribute different importance to their high-order needs. McClelland (1961) observes that lower echelon managers tend to be primarily motivated by the need for achievement, while the need for power becomes more prominent at higher echelons of the hierarchy. Managers attribute growing importance to different types of cognitive outcomes, such as autonomy, responsibility and opportunities for personal growth and for being influential in the work context (Lahiri and Srivastva, 1967). This may be attributed to the fact that as managers move up the organisational ladder, they tend to perform substantially different functions with increasing emphasis on administrative and external monitoring responsibilities compared to the more technical tasks performed at lower levels of management (Gomez-Mejia et al., 1985). The heterogeneous nature of tasks and skills inherent in these occupations may generate different opportunities for managers to satisfy certain higher-order needs, thus impacting on the perceived satisfaction of those outcomes.
A number of studies based on the pivotal work of Porter (1961) demonstrate that organizational level is related to the amount of perceived deficiencies in need fulfilment, with lower echelon managers being more dissatisfied than middle echelon managers in attempting to fulfil higher-order needs such as autonomy and self-actualization, presumably because higher cognitive outcomes are more attainable at higher echelons (Porter, 1961, 1962; Haire et al., 1963; Porter and Lawler, 1964; Slocum, 1971). As a consequence, higher echelon managers are likely to be more satisfied with several cognitive dimensions such as, the opportunity for personal growth and for exerting their influence in the organization, as well as with the amount of responsibility and the possibility of using their abilities and knowledge in their job (Porter, 1962; Porter and Lawler, 1964). All in all, these studies suggest a trend where satisfaction with higher-order outcomes increases at higher echelons of hierarchy. This is seen as a consequence of the decreasing difference between what is desired and what is obtained in reality. Porter's (1961; 1962) results are in line with those reported by Rosen and Weaver (1960) and Rosen (1961) who identified the same trend in relation to two other cognitive dimensions, namely feedback and pride of being employed by the company.
The above discussion leads to the following hypothesis (stated in the null form):
H3: There is no association between hierarchical level in the organization and level of satisfaction with cognitive outcomes.
Consistent with Elizur et al. (1991) cognitive outcomes encompass: (a) pride to work for the company, (b) work meaningfulness, (c) feedback, (d) opportunity for personal growth, (e) influence in work, (f) advancement, (g) responsibility, (h) use of ability and knowledge, (i) job interest.
4. methods
4.1. RESEARCH SETTING AND SAMpLE
Data for this research were collected in an overseas subsidiary of a large US-based corporation operating in the service sector. Since its establishment in Italy (where deregulation of the industry occurred in 1997), the organization experienced stable profit and revenue growth in all years and did not incur any major restructurings. Its workforce grew steadily by an average of 15.5% per annum since 2000.
The perceptions of 1,771 mid-level managers across five echelons from the subsidiary were collected from the company's annual survey questionnaire. Management layers were identified according to the job title of the respondent reflecting their responsibility.
The choice of a single research setting is advantageous for the present study as comparable responses were obtained in terms of the reward package offered to employees and the environmental conditions to which they were exposed (Bourguignon, 2004; Komin-is and Emmanuel, 2007). Preliminary investigations confirmed that all managers were subject to common human resources policies and management control practices such as training and performance appraisal.
The material reward package offered to mid-level managers comprises of three major components: a fixed-pay component, an individual cash bonus determined by the performance review and other non-cash benefits related to the performance of the business unit the manager works in. Base pay differs across mid-level managers. Base pay stratification encompasses seven pay levels, which correspond closely to the echelons of the company's hierarchy. The performance-related cash bonus is intended to foster the attainment of pre-set performance targets and is linked to the performance review, which is conducted on a trimester basis. At the time of the research, this review was based on a set of three financial measures derived from the company's and business unit's financial statements. The process of measurement and the remuneration rules was the same for all the respondents. Provision of non-cash bonuses was based on the attainment of specific non-financial objectives (for example, acquisition of a pre-set number of new clients within a given time period) and it took the form of "competitions" between business units. In 2009, base pay was the only means through which the material reward system distinguished among groups of managers at different echelons. Mid-level managers in the sample could reach their position either through career advancement within the organization or through selective recruitment. Preliminary fieldwork demonstrated that, irrespective of the career pathway, all managers were subject to formal induction courses and on-the-job induction training, which took place within the first three months after employment.
The organization conducts an employee opinion survey annually; the present research is based on the analysis of the survey questionnaire employed in 2009, referred to as E0S-09. E0S-09 is directed only to those mid-level managers with at least three months of tenure: 1925 managers in total. Our preliminary discussions with executives from the company indicated that E0S-09 was used by the headquarters to compare different national settings. The questionnaire intended to gather middle managers' perceptions in three areas, namely the reward system in use, the perceived supervisory and peer support and a broad set of dimensions collected under the umbrella term of "engagement" that encompasses items such as "job interest" and
Table 1. Overview of the sample
Occupational Group Absolute Number % of Total Sample
Level 1 Managers 23 1,30%
Level 2 Managers 66 3,73%
Level 3 Managers 286 16,14%
Level 4 Managers 301 17,0%
Level 5 Managers 1.095 61,83%
Total n. = 1,771
"meaningfulness of work". The original questionnaire includes 97 items, which gauge managers' perceptions using a five-point Likert response format (ranging from "strongly agree = 5" to "strongly disagree =1").
The content of the survey was defined by top management, although discretion was allowed to national divisions to include further items for special purposes. Respondents returned their completed questionnaires through the organization's internal mail service. Completed questionnaires were returned by 1771 managers, which represents a return rate of 92%. Eighty percent of the sample was female, and 20% male. The majority of those who responded were aged 35 or less (71%), while 29% were more than thirty-five years old. All respondents in the sample came from five echelons of the organization's mid-level management. It is noted that the sample of this research is not random in the strict statistical sense. In order to assure comparability of the results, the sample includes those managers who: (1) were identified as mid-level managers (Mangaliso, 1995); (2) received the EOS-09; and (3) had at least 3 months of tenure in their managerial position. Table 1 offers an overview of the sample.
4.2. RESEARCH INSTRuMENT
The data employed in this study was derived from a subset of 50 items included in the EOS-09. The choice of these items and their classification to work outcomes was based on the comparison between the items included in E0S-09 vis-à-vis the 24 work outcomes forming the "work values questionnaire" (WVQ) used by Elizur et al. (1991).
In order to meaningfully classify the items contained in the EOS-09 into work outcome modalities, the rationale behind the construction of the WVQ was preliminary investigated. It appeared that each item in the WVQ was identified as a need satisfier in (at least) one of the content theories on which the framework is grounded. For instance, Elizur et al. (1991) reports that "the job characteristic model of Hackman and Oldham (1980) is represented by items like: variety, use of ability, meaningful
Table 2. Classification of items in the EOS-09: abbreviated illustration
EOS-09 Item Comparable Item in the Original Instrument underlying Content Theory of Work Motivation Item Description (Elizur et al., 1991) Modality of Outcome (Elizur et al., 1991)
My compensation is satisfactory since it is competitive with similar jobs in other companies Compared to similar jobs in other places, my pay is poor (disagree) ERG Theory (Alderfer 1972) Pay, the amount of money you receive Instrumental
I am satisfied with the pay I received last year since I was adequately compensated for the work I was required Considering the work required, the pay for my job is what it should be (agree) ERG Theory (Alderfer 1972) Pay, the amount of money you receive Instrumental
I am satisfied with the equipment and materials I receive to do my job Working conditions. This category was used for stories in which the physical conditions of work, the amount of work or the facilities available for doing the work were mentioned [...] MotivationHygiene Theory (Herzberg 1966) Work Conditions Instrumental
I am proud of working in this organization since here people help each other when they are in need I can count on my co-workers to give me a hand when I need it Achievement motivation theory (McClelland 1961) Co-workers Affective
I feel satisfied of the way in which my manager coaches and mentors my development Supervision-technical. [...] Statements about the supervisor's willingness or unwillingness to delegate responsibility, or his willingness or unwillingness to teach, would be classified under this category MotivationHygiene Theory (Herzberg 1966) Supervisor, a fair and considerate boss Affective
I am happy when I do a good job since I receive praise and recognition from my Manager My boss gives me credit when I do good work (agree) ERG Theory (Alderfer 1972) Recognition for doing a good job Affective
Overall I am satisfied with my present job Generally speaking I am very satisfied with this job Job Characteristics Model (Hackman and Oldham 1980) Meaningful Work Cognitive
I find my work challenging and fulfilling Work itself. This category was used when the respondent mentioned the actual doing of the job or the tasks of the job as source of good or bad feelings about it MotivationHygiene Theory (Herzberg 1966) Job Interest Cognitive
I am satisfied with the opportunities my organization offers to meet my career goals Advancement. This category was used [...] when there was an actual change in the person's status or position in the company MotivationHygiene Theory (Herzberg 1966) Advancement changes for promotion Cognitive
work, independence, feedback, recognition". Therefore, correspondence between the items defined by Elizur et al. (1991) and a number of statements/questions appearing in the EOS-09 questionnaire underlying the five content perspectives could be established. The items included in the EOS-09 were also compared with those adopted by Maslow (1954), McClelland (1961), Herzberg (1966) and Alderfer (1972). For instance, we could establish a correspondence between the item: "My compensation is satisfactory since it is competitive with similar jobs in other companies" in EOS-09 and the item: "Compared with similar jobs in other places my pay is poor (disagree)" in the Existence-Relatedness-Growth
(E.R.G.) questionnaire used by Alderfer (1972). The next step included identifying carefully and grouping together items from the EOS-09 questionnaire in terms of the three modalities of work outcome identified by Elizur et al. (1991). For example, since Elizur et al. (1991) derived the item "pay, the amount of money you receive" from the work of Alderfer (1972) and classified it as instrumental by Elizur et al. (1991), we also labelled the item "my compensation is satisfactory since it is competitive with similar jobs in other companies" in the EOS-09 questionnaire as "instrumental" and grouped it together with other work outcomes of similar instrumental nature. Table 2 summarizes the process of classification.
Classification was informed by a number of procedural guidelines. First, Elizur et al. (1991) puts forward that two need theories, namely Maslow (1954) and Alderfer (1972), were jointly considered in order to determine four items in the WVO. However, it can be observed that these items (that is, pay, esteem, recognition, growth) are derived mainly from the E.R.G. theory (Alderfer, 1972). To maintain consistency in the classification of the items in EOS-09, we took into consideration both E.R.G. items and Maslow items as they were developed by Alderfer (1972). Second, Elizur et al. (1991) is not specific about which items were derived from the work of Herzberg (1966). Cross-checking Herzberg items with those in the WVO identifies 12 items, which were used with minor changes. Third, some of the items in the WVO are common to more than one content theory. For instance, Elizur et al. (1991) suggested that the item "recognition" was included in the questionnaire as it appeared both in Alderfer (1972) and Hackman and Oldham (1980). Similarly, Herzberg (1966) items partially "overlap" with those in Alderfer (1972), Hackman and Oldham (1980) and McClelland (1961). Thus, when more than one reference was identified for an item in the EOS-09, each single source was considered as a potential means of categorization. In the end, our use of the EOS-09 questionnaire was limited to those items with clear correspondence to Maslow (1954), Alderfer (1972), McClelland (1961) or Hackman and Oldham (1980).
A distinct procedure was followed to identify and classify the items grounded in the work of Herzberg (1966). For each item in EOS-09 grounded in Herz-berg's work, we identified the underlying category. We chose to operate a classification only of those items for which we can find a specific driver of identification within each category. For instance the item "I am satisfied with the equipment and materials I receive to do my job" in EOS-09 was classified as "work conditions" according to Herzberg (1966) based on the following code description provided by the author: "This category was used for stories in which the physical conditions of work, the amount of work or the facilities available for doing the work were mentioned [...]" (Herzberg, 1966). However, this procedure required some degrees of interpretation from the researchers, therefore whenever possible we introduced a "confirmatory step", by identifying at least one supporting item among the remaining content perspectives.
The classification of the EOS-09 was independently undertaken by two of the researchers. After providing the first tentative classification, the researchers met to compare and mutually discuss and reconcile differences. A second meeting to finalise the classification of subset of ambiguous items was performed a few weeks later adopting the same procedure (Miles and Huberman, 1984).
4.3. VARIABLE MEASUREMENT AND EMpiRICAL TESTS
Non-parametric tests of independence were performed to find out whether differences between managers' perception of desirable rewards may be associated with the organizational level of respondents. The type of data and the sample size dictates the specific test of independence employed. Hypotheses are tested using Pearson's Chi-square test of independence, with the organizational level serving as the independent variable and a nominal, Likert-type scale, expressing (dis)agreement with an item, serving as the dependent satisfaction variable. Hypotheses are analysed by considering a 99.9% confidence interval. As the survey generated primarily ordinal data, Chi-square is an appropriate choice to assess the relationships between level in the hierarchy and managerial perception of rewards (Siegel and Castellan, 1988). When necessary and conceptually meaningful, adjacent levels of variables were combined to meet the minimum cell expected frequency requirement for the Chi-square test. Specifically, the five levels of agreement with an item were at times collapsed to three levels (agree; not agree nor disagree and disagree) to facilitate the analysis.
5. FINDINGS
Descriptive statistics suggest that managers in general express at least as favourable attitudes toward items belonging to the cognitive and the affective modalities as those included in the instrumental modality. This pattern is consistent across all groups of managers. The evidence suggests that the environment of the five echelons of management studied is relatively rich in terms of desired outcomes.
5.1. INSTRUMENTAL OUTCOMES
In relation to the first hypothesis (H1), the results indicate statistically significant differences for 5 out of 9 items relating to the instrumental facet across echelons (Table 3). There are no meaningful differences in terms of opinion expressed on the design features of the bonus system (item 7 and 8) and on the convenience of working hours (item 9). Because of the nonsignificant results for these three items, H1c and H1d cannot be rejected. At the same time, respondents expressed homogeneous opinions on the "internal" adequacy of compensation (item 1).
Results of the Chi-square tests of 4 items dealing with work conditions indicate that the patterns are not random (p<0.001). Overall, echelon 1 and echelon
5 managers appear more likely to express satisfaction with work conditions compared with other mid-level managers. In contrast, the analysis reveals that a larger than expected number of negative perceptions of work conditions is expressed by level 2 managers. Thus, H1b is rejected. Significant differences in managerial perceptions are also identified for satisfaction with pay (item 1). The largest proportion of positive comments on this statement are expressed by level 1 managers followed by level 5 managers, while the lowest rates of satisfaction are reported for level 2 and level 3 managers. Hypothesis H1a is therefore rejected.
5.2. AFFECTIVE OUTCOMES
Hypothesis 2 investigates whether managerial level is related to satisfaction with affective outcomes. The Chi-square tests (Table 4) show that responses regarding the "opportunity to meet people and to interact with them" do not differ significantly across managers of different echelons. Consequently, H2b cannot be rejected. Similarly, no statistically significant differences are detected for two items included in the "supervision" dimension (item 10 and 18) and for one item dealing with "recognition" (item 28).
Hypothesis H2a examines whether managers are equally satisfied with their relations with co-workers irrespective of their position in the organization. The analysis indicates that, for the items included under the affective facet, echelon 1 and echelon 5 managers express significantly higher rates of satisfaction compared with other groups, while the lowest level of satisfaction is reported by echelon 2 and 3 managers. Thus, H2a is rejected. Table 4 shows that these significant differences in satisfaction extend over items included in the "esteem" dimension, leading to the rejection of H2e.
Finally, out of fourteen items relating to perceptions of supervision, statistically significant differences are associated with 12 items (p < 0,001). Similar differences emerge in relation to the items dealing with the assessment of senior management behaviour, direct supervision, and supervisory behaviour (that is, item 12, 14, 15, 16, 17 and 20). Hence, H2c is rejected. In line manner, the items included under the "recognition" dimension (item 34, 35) show a variety of perceptions, with echelon 3 managers reporting the lowest rates of agreement. Hypothesis H2d is therefore rejected.
5.3 COGNITIVE OUTCOMES
Hypothesis 3 investigates the relationship between perceptions of cognitive/psychological outcomes and managers' level in the hierarchy. No significant dif-
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Managerial level: Level of agreement: Item description: Pay, the amount of money you receive 1-compensation: internal reference 2-compensation: external reference Work conditions 3-information to perform job well 4-provision of trainig 5-work processes well organized 6-provision of equipment Benefits 7-benefit system: transparent 8-benefit system satisfactory Convenient hours of work 9-reasonable hours of work
Table 4. Affective modality - Observed frequency distributions across managerial levels and chi-square test results
Managerial level: level 1 managers level 2 managers level 3 managers level 4 managers level 5 managers Chi-square p-value
Level of agreement: 5 4 3 2 1 5 4 3 2 1 5 4 3 2 1 5 4 3 2 1 5 4 3 2 1 df= 16
Item description: Supervisor, a fair and considerate boss
10- supervisor leads by example 12 6 3 1 1 16 24 11 7 8 94 112 34 26 20 90 126 48 20 17 427 416 109 88 55 30,395 NS
11- supervisor good at motivating 7 6 5 2 3 8 26 9 13 10 69 95 55 32 35 67 100 55 52 27 385 396 134 101 79 68,175 < 0,001
12- supervisor cares about workers 9 8 1 4 1 13 19 14 11 9 84 106 43 18 35 85 97 52 43 24 458 348 151 85 53 74,113 < 0,001
13- supervisor competent 8 10 2 2 1 16 27 10 9 4 95 112 46 15 18 84 123 44 39 11 515 394 98 55 33 83,875 < 0,001
14- supervisor good in coaching 11 6 3 3 0 16 25 13 7 5 103 86 51 20 26 94 115 43 34 15 396 429 167 68 35 42,935 < 0,001
15- supervisor makes time for workers 5 10 4 3 1 12 28 8 11 7 86 103 43 23 31 94 109 49 31 18 427 405 153 77 33 59,018 < 0,001
16- supervisor trustworthty 12 8 2 1 0 23 22 9 6 6 120 74 49 17 26 124 105 39 21 12 515 372 120 55 33 43,827 < 0,001
17- supervisor helpful 10 8 4 1 0 14 30 9 9 4 109 103 37 17 20 121 117 36 18 9 534 392 107 42 20 59,669 < 0,001
18- supervisor role model 13 4 3 3 0 16 30 9 5 6 89 89 68 14 26 94 103 70 22 12 383 383 197 77 55 34,101 NS
19- supervisor mentors development 6 8 6 2 1 3 15 16 18 14 35 103 81 49 18 51 124 66 57 3 252 504 219 87 33 153,694 < 0,001
20- senior management competent 7 8 4 2 2 7 27 8 11 13 57 86 74 37 32 51 121 57 51 21 252 460 208 109 66 58,183 < 0,001
21- senior management role model 7 13 3 0 0 9 21 19 10 7 54 111 71 31 19 65 141 69 23 3 359 469 195 63 9 118,515 < 0,001
22- senior management reliable 7 10 5 1 0 8 21 13 13 11 49 94 72 40 31 75 115 81 27 3 306 438 252 66 33 113,644 < 0,001
23- senior management helpful 9 9 5 0 0 10 17 17 10 12 37 80 89 49 31 45 96 112 39 9 241 405 296 98 55 88,858 < 0,001
24- senior management acts with integrity 13 8 2 0 0 20 33 12 0 1 65 108 94 11 8 85 154 58 4 0 331 517 221 13 13 50,088" < 0,001
25- senior management trustworthy 12 9 1 1 0 17 31 15 2 1 71 86 103 17 9 87 151 57 6 0 350 482 230 22 11 70,267" < 0,001
Recognition for doing a good job
26- praise from supervisor 7 7 6 2 1 19 21 13 7 6 78 98 58 17 35 81 103 69 30 18 386 407 177 68 57 41,828 < 0,001
27- praise from senior management 10 8 4 1 0 15 17 17 10 7 43 86 83 43 31 49 109 97 40 6 219 427 296 109 44 63,092 < 0,001
28- recognition for a good job 6 13 4 0 0 7 23 10 14 12 43 95 41 52 55 36 103 57 63 42 186 372 186 197 154 25,916 NS
29- fair treatment 12 9 2 0 0 12 39 9 4 2 46 126 58 32 24 69 151 57 15 9 315 447 206 96 31 64,073 < 0,001
30- respect from others 14 7 2 0 0 16 36 7 5 2 83 112 51 20 20 78 157 51 9 6 361 493 153 66 22 52,416 < 0,001
Opportunitvto meet people and interact
31- opportunity to meet others at work 8 13 1 0 1 11 38 12 3 2 69 120 60 29 8 157 120 15 6 3 681 364 36 14 0 25,373" NS
Co-workers
32- Co-workers helpful 5 8 8 1 1 2 20 20 19 5 14 94 92 63 23 38 126 87 45 5 153 515 263 131 33 91,746 < 0,001
33- Co-workers cooperative 6 12 3 2 0 4 33 15 12 2 40 111 85 39 11 51 136 84 24 6 208 536 241 88 22 41,542 < 0,001
ferences are found for two dimensions in the cognitive modality, namely the opportunity for promotion and the influence in the job (Table 5) and therefore the hypotheses H3e and H3f cannot be rejected. At the same time, all groups express comparable levels of being proud to work for the organization (item 36). All other tests of the items included in seven dimensions of the cognitive modality indicate that the patterns are not random, and significant differences exist between the observed and expected (no effect) distributions. Generally, managers at echelon 1 express the highest rate of satisfaction with the four dimensions included under the cognitive modality, namely: "opportunity for personal growth", "use of ability and knowledge", "job interest","responsibility", and those in echelon 3 report the lowest level of agreement. Thus, hypotheses H3d, H3g, H3h and H3i are rejected.
For H3b, echelon 1 managers report the higher level of satisfaction with "meaningfulness of work" (items 38 and 39), whilst negative attitudes are reported by managers at echelons 2 and 3. H3b is therefore rejected.
Statistically significant differences are associated with 3 items included in the "company" dimension. The group of managers at echelon 1 are more likely to express greater appreciation and pride to work for the organization compared with other groups. In contrast, level 3 managers appear to report significantly lower levels of satisfaction with these dimensions (items 34, 35, 37). All in all, H3a can be rejected. For the "feedback" dimension, managers at echelons 4 and 5 report the highest rates of satisfaction with the all the items included in this dimension, whereas managers at echelon 2 (item 42) and echelon 3 (items 41 and 43) appear significantly less satisfied. H3c is therefore rejected.
6. CONCLUDING DISCUSSION
The study addresses the question of whether a homogenous reward scheme for mid-level managers can be effective in delivering desirable outcomes, which can instigate and sustain managerial motivation and subsequent performance. A rich conceptualization of reward outcomes based on modalities proposed by Elizur (1984) and Elizur et al. (1991) is used to compare the perceptions of 1,771 managers in the Italian subsidiary of a large US-based company. Chi-square results demonstrate significant differences in satisfaction across echelons within mid-level management. These differences suggest that reward schemes need to be tailored for mid-level manages of different hierarchical echelons.
All three modalities offer a level of satisfaction to mid-level manager in this research setting. Upper and lower mid-level managers at echelons 1 and 5 are the most likely to express adequate satisfaction with the ex-
isting provision of affective, cognitive and instrumental outcomes. In comparison, the remaining managers report lower satisfaction with certain outcomes in the three modalities. Managers at echelon 4 remain unfulfilled in terms of the instrumental and affective dimensions of their jobs. While the motivational contract offered to this group of managers appears to be satisfactory in psychological terms, expressions of dissatisfaction with affective and instrumental outcomes are associated with the perception of pay, work conditions and supervision-related items. This group of managers reportedly would appreciate and therefore be motivated by a contract which emphasizes fixed pay and training opportunities as well as supervisory support in terms of mentoring. Similarly, managers at echelons 2 and 3 express dissatisfaction with each of the three modalities of work outcome. For the cognitive modality, dissatisfaction with feedback, responsibility and work meaningfulness are issues. Lack of supervisor and co-worker sup-portiveness is reported for the affective modality, while for the instrumental modality deficiencies attributed to pay and work conditions are observed. Managers at echelons 2, 3 and 4 share concerns about base-pay and training provided by the organization. A reward package that accommodates these demands for relations with peers and supervisors, feedback and empowerment-related outcomes may provide additional motivational drive to the mid-level managers it is offered to.
Our findings suggest that mid-level management views alternative rewards as desirable. At different echelons managers have different reactions to a comparable set of rewards. This suggests that hierarchical level in the organization should be viewed as a contingent variable that can mediate managers' perception of the reward system in use, corroborating the idea that mid-level management should not be viewed as a homogeneous group in terms of reward satisfaction (Merchant, 1989).
Perhaps more importantly, this study represents an attempt to integrate the rewarded manager perspective in the motivational contract discourse (Merchant, 1989). To this extent, our results complement well the findings of Shields and White (2004) and Bento and White (2006). These studies compare the perceived congruence between performance evaluation and compensation. Bento and White (2006) find that rewarded managers perceive a discrepancy between the actual and the preferred deployment of different reward practices, but this stream of research does not document the impact hierarchical position may have in determining the perception of the desirability of such rewards. The present study adds a different dimension to the "user-perception" (that is, evaluated and rewarded managers) literature. How-
Table 5. Cognitive modality - Observed frequency distributions across managerial levels and chi-square test results
Managerial level: level 1 managers level 2 managers level 3 managers level 4 managers level 5 managers Chi-square p-va lue
Level of agreement: 5 4 3 2 1 5 4 3 2 1 5 4 3 2 1 5 4 3 2 1 5 4 3 2 1 df= 16
Item description: Companv
34- favourable opinion on the organization 16 7 0 0 0 41 19 3 3 0 109 107 49 12 9 160 126 12 3 0 534 425 107 20 9 60,047" < 0,001
35- reccomend organization as great place 12 7 3 1 0 19 25 13 4 5 75 84 75 26 26 87 124 63 18 9 383 383 219 77 33 47,512 < 0,001
36- proud of working for the organization 17 4 2 0 0 27 25 11 2 1 100 91 73 11 11 133 105 54 6 3 447 403 184 41 20 34,342 NS
37- willing to remain with the organization 13 4 6 0 0 19 25 13 4 5 63 101 52 35 35 96 106 57 36 6 372 361 230 88 44 66,881 < 0,001
Meaningful work
38- satisfaction with the job 12 7 4 0 0 14 25 17 5 5 66 115 44 38 23 69 145 54 27 6 329 460 153 120 33 51,151 < 0,001
39- proud when job is well done 13 9 1 0 0 27 25 10 3 1 109 97 46 26 8 136 120 39 6 0 460 405 164 55 11 31,646" < 0,001
40- understand job expectations 8 13 1 1 0 20 31 11 2 2 68 157 45 11 5 111 177 9 2 2 353 660 68 14 0 76,010" < 0,001
Feedback on the results of vour work
41- regular feedback about performance 5 8 6 2 2 11 28 8 11 8 61 109 49 35 32 87 135 42 20 17 416 416 153 77 33 85,984 < 0,001
42- feedback received by others 6 5 8 3 1 13 22 9 15 7 74 102 57 19 34 75 112 69 30 15 383 383 186 88 55 62,679 < 0,001
43- feedback provided timely 9 5 6 3 0 13 23 13 11 6 69 106 54 29 28 79 112 64 25 21 383 405 186 77 44 47,311 < 0,001
Opportunitv for personal growth
44- job favours long term development 11 5 7 0 0 8 29 12 10 7 60 97 60 35 34 54 115 72 48 12 230 427 241 120 77 40,978 < 0,001
45- updated with developments 10 9 3 1 0 12 32 10 8 4 34 112 74 37 29 46 154 55 37 9 153 526 241 131 44 50,069 < 0,001
Influence in work
46- opinions are valued 8 8 4 1 2 3 34 13 12 4 41 109 61 49 26 33 109 93 42 24 131 427 296 153 88 29,382 NS
Advancement, changes for promotion
47- opportunity to meet career goals 10 5 7 1 0 12 25 15 10 4 57 80 60 46 43 54 120 60 47 20 230 416 208 142 99 37,236 NS
Responsibilitv
48- work independently and take risk 10 8 3 1 1 8 30 17 8 3 43 97 71 46 29 54 139 75 27 6 188 495 276 101 35 62,559 < 0,001
Use of ability and knowledge in your work
49- encouraged to be creative 9 10 2 1 1 9 29 15 9 4 58 109 61 35 23 75 148 54 18 6 263 514 208 88 22 53,327 < 0,001
Job interest
50- interesting and fulfilling job 11 8 4 0 0 20 23 14 5 4 74 97 63 29 23 90 151 45 9 6 372 oo 175 77 33 56,999 < 0,001
ever, that stream of research limits its attention to monetary/material inducements only, whilst the findings of this study suggests that significant differences between groups of managers can be associated to instrumental, cognitive and affective outcomes.
The employment of the modality approach proposed by Elizur (1984) encompasses a wide perspective on valuable work outcomes, allowing us to observe that mid-level managers differ in the perception of satisfaction and desirability across material and immaterial rewards. To date, researchers have observed that immaterial rewards are underutilized in the design of control systems (Flamholtz et al., 1985; Malmi and Brown, 2008), even though they appear to have an impact on managerial motivation equal to extrinsic rewards (Kominis and Emmanuel, 2007). This study suggests that the adoption of a more comprehensive framework of analysis enlarges our understanding of the differences between groups of managers' satisfaction in rewards outcomes. In addition, the emerging observation of differences associated with the provision of affective outcomes indicates that the study of reward desirability may not revolve around a dual approach of the extrinsic and intrinsic. For control system designers, a more comprehensive approach to rewards may facilitate the identification of unfulfilled needs and corresponding rewards to fulfil them at different organizational echelons more directly. This not only contributes to devise more desirable reward systems but also helps in identify precisely those modalities or work outcomes that managers perceive as unsatisfactory. For instance, our findings suggest that managers at echelons 2 and 3 are the least likely to be satisfied with the actual provision of affective and cognitive outcomes. Attention to such outcomes in the design of the company's reward package can provide powerful motivational drivers for these mid-level managers
Finally, our findings carry implications for the design and use of reward systems for management control purposes in practice. A single universal reward package for mid-level managers appears to be ill-advised since different patterns in mid-level managers' reward satisfaction are likely to emerge. The inclusion of various inducements in a reward package, both in absolute and in relative terms, will be appreciated differently by groups of organizational members, therefore a more tailored and flexible reward system may be suitable in order to accommodate diversity of views across echelons (Ehrenberg and Milkovich, 1987; Lawler, 2000). To this extent customized reward plans such as "cafeteria system" or "flexible benefit plans" (Barringer and Milkovich, 1998) may represent an opportunity to accommodate
diverging manager attitudes toward material and non-material inducements by allowing individuals a choice in the rewards that they receive (Lawler, 2000). Notwithstanding that these systems can be costly, it should still be possible to customize reward schemes that apply to managers who share common positions in the organisation's hierarchy.
Certain limitations of this study should be noted. These weaknesses indicate possible avenues for future research on the perception of effective reward schemes. First of all, the instrument employed for this research was not purposely devised to measure the modality of outcome facet (Elizur, 1984). The use of data collected through the EOS-09 questionnaire provides the distinct advantage of gathering reward perceptions from a large sample of mid-level managers, the construct validity of the instrument is however doubtful. Although the list of items included in the company's survey instrument is large enough to capture a broad set of rewards in the mid-level manager's environment, it is acknowledged that the final selection of the rewards included in the analysis is linked to the theoretical framework employed, and, at least in part, is not free from our subjectivity. In addition, to the extent that the study's sample is limited to one company and one industry, its findings may pertain solely to the firm and industry sampled, implying the need for validation of the findings in different settings. Finally, the present study is cross-sectional and it is questionable whether the results hold over time. Future research could adopt a longitudinal approach in order to verify whether (and how) managers' perceptions of dis/satisfaction with different rewards are stable over time.
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