Publications
Publications
- 2018
Managing Through Organizational Change: Employee Alignment in the Presence of Unexpected Career Concerns
By: Ohchan Kwon and Jee-Eun Shin
Abstract
This study examines performance consequences due to unexpected career concerns – layoff risks due to institutional reasons. Exploiting a company-wide announcement of a merger decision by management as a trigger event for unexpected career concerns, we examine employee performance at a rental car company with stores across US airports before and after the merger announcement. First, we document positive incentive effects. Employee performance exhibits significant improvements subsequent to the merger announcement which suggests that unexpected career concerns trigger incentives to minimize potential layoff risks. Second, we document effort allocation effects depending on the extent of employee alignment (i.e. the extent by which employees are aligned with the overall company strategy). In particular, our findings suggest that in the presence of unexpected career concerns, employee alignment can mitigate myopic behaviors to fixate effort levels on relatively short-term performance measures at the expense of long-term performance measures. Our findings provide new evidence for the benefits of employee alignment as agile controls in mitigating career concern pressures during organizational change.
Keywords
Career Changes; Performance Measures; Incentives; M&A; Employees; Personal Development and Career; Mergers and Acquisitions; Organizational Change and Adaptation; Performance; Motivation and Incentives
Citation
Kwon, Ohchan, and Jee-Eun Shin. "Managing Through Organizational Change: Employee Alignment in the Presence of Unexpected Career Concerns." Working Paper, July 2018.