The design and effects of control systems: tests of direct- and indirect-effects models

Abstract

Two models are developed on the effects of a control system that include participative standard setting, standard-based incentives, and standard tightness. The direct model proposes that the control system directly affects performance, whereas the indirect model proposes that the effects of the control system on performance are indirect through the mediating influence of job-related stress. Hypothesis tests and a models-comparison test using structural equation modeling indicate that the indirect model has a significantly better fit to the data than does the direct model.