Incentive Effects on Ethics
Tae-Youn Park, Sanghee Park, Bruce Barry
Academy of Management Annals · 2022 · Volume 16 · Issue 1
Abstract
We review and synthesize research on the effects of incentives on ethical and unethical behaviors. Our review of 361 conceptual and empirical articles, which are scattered across multiple disciplines (e.g., management, psychology, economics, education, health care delivery), reveals wide variation in how they conceptualize key concepts (i.e., incentives, ethics), how they theorize the effects, and what samples and research methods they use in empirical tests. We identify seven theoretical view that explain the link between incentives and unethicality, and synthesize them into three primary processes: cost–benefit comparison, motivated reasoning, and decreases in prosocial motivation. Our review of empirical evidence shows that some effects are relatively more established (e.g., goal-driven motivated reasoning) than others (e.g., prosocial motivation decline), but they all await more field (vs. laboratory experiments) evidence. In addition, giving substantial attention to the forms of unethicality in specific contexts, we show whether and how the effects of incentives on unethicality vary by professional domains, especially in education, health care delivery, and for-profit business. Building on the review, we present a multilevel, cyclical process model capturing how incentives and unethicality are related. We conclude by identifying opportunities for future research.
Keywords
ethics, incentives, multilevel, pay-for-performance, unethical behaviors
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