Gainsharing And Mutual Monitoring: A Combined Agency-Organizational Justice Interpretation

Abstract

This study examines the behavioral consequences of “gainsharing” using a theoretical framework that includes elements of agency and organizational justice theory. We propose that when gainsharing is used as a collective form of incentive alignment, mutual monitoring among employees is a direct function of procedural and distributive fairness. The hypothesis was supported in a quasi-experimental field study of 221 employees working for two firms. The implications of the study for future extensions of agency theory to intraorganizational phenomena are discussed.