Contingent Reward, Regulatory Focus, and Trust

Ronald F. Piccolo

Rollins College

Tomek A. Kosalka

University of Central Florida

Craig Crossley

University of Nebraska

The Full Range of Leadership

• • • Transactional Leadership (TA) ▫ Refers to the exchange relationship b/w leader and follower to meet their own self interests.

Transformational Leadership (TF) ▫ Refers to the leader moving the follower beyond

immediate self interests.

Scholars tend to suggest that mechanisms underlying TF and TA are in conflict (Jung & Avolio, 2000), ▫ TA (Contingent Reward) leaders activate extrinsic, short-

term, task- and self-oriented psychological mechanisms

▫

TF leaders rely on emotional arousal, trust, shared values, and selfless effort

Contingent Reward

• • • • • An active dimension of the Transactional Leadership model (TA) Multi-Factor Leadership Questionnaire (Bass & Avolio, 1995) ▫ ▫ ▫ ▫

My leader…

Provides me with assistance in exchange for my efforts. Discusses in specific terms who is responsible for achieving performance targets.

Makes clear what one can expect to receive when performance goals are achieved. Expresses satisfaction when I meet expectations.

Bass (1985) – Transformational leadership builds on and augments transactional leadership (although not vice versa).

Bass and Avolio (1993) assert that the augmentation effect is a "fundamental" aspect of TF-TA leadership theory.

Countless studies support the notion that TF adds beyond the TA dimensions – including contingent reward (CR)

80 In the last 5 years…A Resurgence of Research on Transactional Leadership 70 60 50 Judge & Piccolo (2004)    r r CR = .39 ( r CR > r TF; Follower Sat; Leader Performance TF – CR r TF = .80

= .44) 40 70* 30 20 15 10 25 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: ISI Web of Science; * 51 articles YTD 2009.

Keyword = Transactional Leadership, 2005 - 2009

• • • • • •

Measurement of the Concept: 13 Motivation: 22; Goals: 23 Justice/Fairness: 20 Creativity/Innovation: 20 Moderators: 43 Mediators (process): 59

ISI Web of Science

The Current Study

• Leaders influence the motivational self-regulatory focus of their followers, which will mediate different follower outcomes at the individual (and group) level (Kark & van Dijk, 2007).

• We propose…not only are TF and CR highly related, not only share validities across outcomes, but are ultimately realized through similar processes – self regulatory focus (promotion).

• We seek to extend the model proposed by Kark & van Dijk: leaders who exhibit CR behaviors (providing assistance, defining

performance standards, demonstrating how work behaviors

translate into rewards) prime the focus of followers for achievement (i.e., promotion).

Model of Relationships

Contingent Reward Promotion Focus Performance Trust

Method

• Participants: 87 sales professionals from a food distribution company participated in a 3-day training and strategic planning session.

• At the end of the first day, participants completed a battery of assessments, including measures of contingent reward, regulatory focus, and trust.

• After four weeks, general managers of the sales divisions provided weekly performance data (# of buyers; $$ sold, performance-to-goal).

Measures

• • • • Contingent Reward (Bass & Avolio, 1995) Regulatory Focus (promotion; Wallace & Chen, 2006) , a     

“Right now, I am concerned with…”

Accomplishing a lot of work Getting my work done no matter what Getting a lot of work finished in a short amount of time Work activities that allow me to get ahead My work accomplishments  How many tasks can I complete Trust (ad hoc items), a = .90

  I Feel I can trust my LGM I sometimes hold back from trusting my LGM  I have complete trust in my LGM  I know I can Trust my LGM Performance = # of New Buyers (weekly), 4 weeks = .77

Correlations

1. Contingent Reward 2. Promotion Focus 3. Trust 4. Performance 1 5. Performance 2 6. Performance 3 7. Performance 4

1

(.84) .27* .74* .31* .33* .23* .21* Note. n = 75 – 81. * p < .05.

2 3

(.77) .22* .27* .08

.14

.08

(.90) .19† .23* .18

.09

4

- .73* .80* .70*

5 6

- .72* .81

- .82*

Regression Results

Promotion Focus

1. Contingent Reward Trust b .23* .05

R 2 .07* D R 2 .07* 2. CR x Trust 2.23* .15* .08* 1. Contingent Reward 2. Contingent Reward Promotion Focus b

Performance

R 2 D R 2 .31* .25* .20† .09* .13* .09* .04*

CR x Trust → Promotion

6,5 6,0 5,5 5,0 Low CR Low Trust High Trust High CR

Summary

• CR related to performance outcomes in all four weeks • CR primed promotion focus (extension of Kark & van Dijk) ▫

Effect was moderated by Trust in supervisor

• Promotion focus related to performance in week one only ▫

Are the effects associated with primed regulatory focus temporal?

• Mediating Effects of Promotion Focus were modest ▫

n~80; low power

• Effects of Promotion on Goal Setting and $$ Sales were weak

Conclusions

• Original theorizing on augmentation effect of TF: ▫ Transformational adds to (but does not substitute for) the effectiveness of transactional leadership.

• • Effects of TF & CR are realized through similar mechanisms (e.g., self regulatory focus) • Recent empirical results ▫ Validities are similar across criteria.

▫ In many cases, transactional adds to the effectiveness of transformational (e.g., Follower Satisfaction).

Relationship between CR and Promotion Focus depends on Trust (see also, LMX)

Why does TA augment TF?

• CR comprises leader activity that is not adequately captured in Transformational behaviors. CR leaders… ▫ Make clear expectations of outcomes & rewards ▫ Actively monitor progress towards objectives • CR satisfies self-interested, individual needs (i.e., CR taps individual need systems that are not fully engaged by TF leader behaviors) ▫ “Whenever there is a conflict between universal principles and self interest, self interest is likely to prevail”

Open Society: Reforming Global Capitalism

▫ “Never appeal to a man’s ‘better nature’; He may not have one. Invoking his self-interest provides much more leverage.”

Lazarus Long (by Richard A. Heinlein)

Future Studies

• • • • Additional Power More sophisticated examination of effects over time Alternative outcomes (affective, behavioral) Examination of CR vs. TF ▫

To what extent does context play a role?

•

We look to Ronit Kark for guidance



Thank You.