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When Do Feedback, Incentive Control, And Autonomy Improve Morale? The Importance Of Employee-Management Relationship Closeness.

Managers of one large corporation were expecting the generosity of their annual incentive award to build employee morale. Instead interviewees reported, for example, "It has absolutely no effect on me." "[It's] negative for many. They didn't get what they expected, so they were mad." Managers use various morale-boosting approaches (often called management controls), such as incentives, employee participation, and feedback, that sometimes do more harm than good (Kohn, 1993b; Lawler, 1973).

This article tests a model that explains one reason behind these results: the moderating and direct effect of employee-management relationship closeness. The research questions are: "To what extent does employee-management relationship closeness both affect morale directly and moderate the effects of management controls on morale?" and "To what extent do employee morale and employee-management relationship closeness affect perceived harmonious teamwork in an organization?"

In the theoretical development section that follows, the article introduces the research model and discusses literature supporting the model. Next, the methodology for testing the model is presented. Then the article reports an empirical test of the model in the context of 100 manufacturing plants. Finally, the article discusses the results in light of other research, and outlines several implications for research and managerial practice.


This section first discusses how we developed a research model through analysis of qualitative data. The model's concept definitions and hypotheses are then discussed. Finally, the literature related to the model is briefly reviewed.

This study began with seventeen in-depth interviews of computer operations professionals in a large corporation in the travel industry whose job was to keep their computer reservation system running. The interviews often turned to what kept the computer professionals highly motivated to do their job of keeping the system running. In turn, discussions about worker motivation or morale frequently gravitated toward the relationship closeness they felt with their boss.

Concept definitions

By morale, we mean the degree to which an employee feels good about his or her work and work environment. Morale is distinguished from motivation, which refers to readiness to act (Lawler, 1973). Morale is broader than intrinsic motivation or job satisfaction, which typically refer to feelings about one's job (Hackman and Oldham, 1975). We use the broad term morale in the sense it is used in common speech; namely, as a term that encompasses constructs like intrinsic motivation, job satisfaction, experienced work meaningfulness (Hackman and Oldham, 1975), organizational commitment (Mowday et al., 1979), and pride in one's work. By relationship closeness, we mean the extent to which an employee has a sharing, open, familiar relation with management. Thus, relationship closeness is a broad concept that encompasses several specific constructs like interaction, open communication, and informal relations between employees and management.

We define management controls as attempts to ensure desired outcomes, often by trying to influence people (Anthony, 1965; Lawler and Rhode, 1976). Management controls are frequently used to improve morale, which, in turn, should improve other organizational outcomes. We use the term management controls as a broad set of managerial approaches to encourage employees to move toward desired objectives, including these types of specific controls: accountability (Tetlock, 1985), feedback (Earley, 1986), incentives (Jenkins, 1986), and empowerment/ autonomy (Breaugh, 1985).

While we cannot report here, due to space limitations, the full qualitative results, the pattern that emerged from the interviews may be illustrated as follows. One employee was asked to describe his or her feelings when interacting with one liked supervisor and one unliked supervisor. In each case, the employee described the interaction in terms of a management control (e.g., accountability). With the disliked supervisor, the employee described how written accountability for computer outages worked. The employee said the supervisor was distant, cold, and did not try to develop a sharing, open relationship with employees. It was clear that the accountability process hurt the morale of the employee because s/he interpreted the accountability process negatively. With the liked supervisor, the employee described how a former supervisor, using a hands-on approach, would actually take over the job for the operator on occasion. We might call this management control "close supervision," or, in the extreme, "micro-ma nagement." Whereas we expected this action to hurt morale, the employee interpreted this supervisor's action as a training/helping function, and said the behavior was appreciated. Further questioning found that they had had a long, close, familiar relationship.

We found the same thing regarding supervisory feedback, another management control. One employee with an impersonal relationship with the supervisor reported that receiving supervisory feedback hurt her/his morale. S/he didn't like such feedback.

Conceptual Model

The common theme of these instances is that the effect of a management control mechanism (e.g., accountability, close supervision, feedback) on employee morale depended on whether or not the employee/manager relationship was close. If the relationship was close, the control lifted morale. If the relationship was not close, the control lowered morale. Therefore, from an analysis of our interviews, we proposed the left section of the model shown in Figure I:

Hypothesis 1: Employee-management relationship closeness will moderate the linkage between management controls and employee morale.

It was also clear from the interviews that employee/supervisor relationship closeness directly affected employee morale. When an interviewee felt good about his or her supervisor, he or she tended to feel good about the workplace. Hence, we hypothesized,

Hypothesis 2: Employee-management relationship closeness will be positively related to employee morale.

Because relationship closeness relates to morale, it is a quasi moderator, not a pure moderator. A pure moderator does not relate directly to the criterion variable. If a variable that relates to the criterion interacts with the antecedent variable, it is a "quasi moderator variable" (Sharma et al., 1981). For simplicity, we shall describe these with the term "moderator."

From the interviews, we speculated that employee morale would affect perceptions of harmonious teamwork, by which we mean the degree to which employees or work groups are perceived to work together smoothly. Perceived harmonious teamwork is a second-order concept that has indicators like: cooperation, conflict resolution, and coordination/integration among units. In our interviews, the morale of workers seemed to relate to how positively they perceived teamwork to be functioning in their group. This was important because harmonious teamwork was an oft-mentioned key to keeping the computer operation running. On this basis, we speculated that relationship closeness would positively relate to perceptions about the harmony of the teamwork. Harmonious teamwork will have other antecedents as well (e.g., team member homogeneity). However, these are not included in this study.

Hypothesis 3: Employee morale and employee-management relationship closeness will each be positively related to perceived harmonious teamwork.

Literature Related to the Model

Before testing the conceptual model, we reviewed findings in several literatures for assurance that the model was not inappropriate. In the leader-member exchange literature (e.g., Schriesheim et al., 1998), we found that leader consideration toward followers reflects a positive relationship, which makes the directive (management control-related) behavior of a leader more effective. Kohn (1993b) pointed to evidence that contingent rewards tend to lower intrinsic motivation. Lawler and Rhode (1976) said that tight budgetary controls had negative impacts on employee behavior. Simons (1995) referred to negative effects of incentives. Perhaps, this indicates that something moderates the effects of controls on morale.

Some research studies posit that relationship closeness matters to morale, either directly or through controls. A review of incentive control research found that incentives do not consistently improve morale (Jenkins, 1986). Rather, Lawler (1971) argued that pay systems (including incentives) work best in an environment of trust. Earley (1986) found that the effects of feedback on performance were mediated by trust and perceived importance of the feedback. Tetlock (1985) pointed out that the superior/subordinate relationship could improve the effectiveness of accountability controls by decreasing fear of reproof. In the context of budget controls, Hofstede said that "the interpersonal relation and communication between superior and subordinate is of much greater importance for the functioning of the organization than the power relationship" (1967: 58). These anecdotes suggest that relationship closeness is important both to employee morale itself and to the effect of management controls on morale. Hence, the literature search increased our confidence in the model.


Because every employee has a boss and a level of morale, we felt the model would be applicable outside the computer operation. So we decided to test the model in another operational setting: the international manufacturing plant. Although it is more common to create one's own measures, this article tested the model using data that had already been gathered as part of the world class manufacturing (WCM) studies (e.g., Flynn et al., 1995). Data were collected from manufacturing plants in Japan (41 plants), Italy (33), and the United States (26) in the automotive, electronics, and machinery industries. Stratified random sampling was done to select about the same number of plants in each country and each industry. Plant managers were contacted for their voluntary participation in the study. Of those successfully contacted, sixty-six percent returned the questionnaires. The questionnaires were collected in sealed envelopes to maintain anonymity of responses. The questionnaires were pilot tested at several plants t o obtain feedback from managers, superintendents, engineers, and workers. Based on this feedback, a few items were added or deleted in some scales. Before administering the questionnaires in Italy and Japan, the questionnaires were first translated into their respective languages and then translated back into English and compared with the original to remove inconsistencies. Because these countries presumably have cultural differences, we added two country covariates (control variables) to each hypothesis test.

We selected items by searching the WCM study for constructs that would properly represent the high level concepts of the model (see Figure I; the specific items used are available from the first author upon request). Ideally, we could have used more or different constructs, but the constructs we used were limited to those available in the WCM study. For example, leader-member exchange (LMX) scales could have been used for the relationship closeness concept, as the two concepts are very similar. However, they were not available in the WCM study. Also, LMX differs somewhat from relationship closeness in that LMX is explicitly manager-subordinate dyadic (Sparrowe and Liden, 1997) and uses specific subdimensions like loyalty, perceived contribution, and affect (Schriesheim et al., 1998).

The following discusses the face validity of these constructs as subtypes of the high-level concepts in Figure I. Feedback and incentive control fit within the management control category because they are actions managers take to influence employees to meet organizational goals. Autonomy is a management control somewhat similar to feedback and incentives in that it is granted by managers to establish a participative environment that encourages employees to take ownership of their jobs without constant supervisory control. Management/employee interaction and communication of plans reflect relationship closeness in that they each indicate the extent to which management is willing to interact and share information with workers. Egalitarianism reflects relationship closeness in that it indicates the social distance between employees and management. Pride in work and organizational commitment fit the definition of employee morale in that they reflect employee feelings about the job and the company, respectively. C ooperation, team problem solving, and integration of units reflect harmony within and among teams in a plant, matching the definition of perceived harmonious teamwork.

Recognizing that the subjective nature of categorization could lead to researcher bias, we empirically tested our categorizations. Forty-two trained upperclass undergraduate raters categorized the items into constructs and the constructs into high-level concepts. This was done instead of factor analysis because the issue in the conceptual stage is proper categorization of concepts rather than the atheoretical, mathematical separation of factor analysis, which could produce conceptually artificial results.

On average, we found 80% rater agreement with specific researcher item categorizations (Table 1). Each categorization made by the researchers was supported by at least a plurality of the forty-two raters. For the categorization of the constructs into high-level concepts, raters agreed with the researchers an average of 83% of the time, again, with a plurality on each item (Table 2). This analysis supports our conceptual categorization of items and constructs.

The level of analysis for each construct (e.g., pride in work) is the manufacturing plant. Hence, each data point was formed by aggregating the responses of plant supervisors, managerial specialists, and direct laborers. This diversity of respondents eliminates the single-source bias to which many studies are subject.

The researchers next tested reliability and convergent validity of the constructs used for this study. In general, we wished to use constructs that met a Cronbach's alpha hurdle of about .70, relaxed to about .60 for constructs with fewer than three items, in accordance with Anderson and Coughlan (1987). Table 3A shows the reliability results. We also did a factor analysis for each construct and found the constructs to be unidimensional (only one factor with an eigenvalue of 1.0 or above) and the factor loadings acceptable (all above 0.6).

First-Order versus Second-Order Concept Formation

Once the reliability and validity of the constructs were established empirically, the items were averaged to create their respective constructs. To determine whether to test the model at the second-order concept level (e.g., management controls) or the first-order construct level (e.g., feedback, autonomy), an analysis was performed similar to that done to analyze second-order factor models (e.g., Hunter and Gerbing, 1982; Kumar and Dillon, 1990). It was decided a priori that those concepts (e.g., management controls) whose construct components (e.g., feedback, autonomy, incentive control) were internally consistent and had acceptable convergent validity as a set would be tested at the second-order level by averaging scores of the related constructs.

This was judged by performing reliability and factor analysis on the constructs within each concept. For the internal consistency test, each construct was treated like an item and a reliability analysis was done for the concept. The second requirement was for the concepts to display convergent validity, as Table 3A demonstrated for the items. The reliability analysis (see Table 3B) demonstrated adequate support for treating relationship closeness, morale and perceived harmonious teamwork as unitary concepts. Management controls, with an alpha of .42 (3 items), is not a unitary concept. The factor loadings confirm that relationship closeness, morale and perceived harmonious teamwork are much more internally cohesive concepts than is management controls. Hence, the researchers chose to test hypotheses using relationship closeness, morale and perceived harmonious teamwork as second-order concepts. Management control was employed as three separate constructs--feedback, incentive control, and autonomy.

The hypotheses were tested with regression techniques instead of structural equation modeling (SEM) because our model was new and tentative (Baldwin, 1989). Initial theory building initiatives often entail case studies in which researchers collect qualitative information and simple quantitative data to understand the underlying phenomenon (Eisenhardt, 1989). Later, tentative theories are tested with correlation and regression analysis. We believe our attempt to develop theory in the present study falls in the tentative stage. Hence, we chose to use regression analysis for this study. A natural progression of this stream of research would be to test the full research framework with SEM techniques. Before testing, the scores were put into standard form. Moderation terms were created by multiplying standardized terms together in order to minimize multicollinearity (Aiken and West, 1991).

Incentive Control Operationalization

The more controlling incentives are, the less likely they are to lift morale, because researchers have found that controlling feedback hurts morale-like constructs such as intrinsic motivation (Harackiewicz and Larson, 1986; Ryan, 1982). This effect is likely to be exacerbated if the employee-management relationship is poor. "For example, if a financial reward is perceived as a bonus for good work rather than as an inducement to keep people on the job, it may not have a deleterious effect on the valence of intrinsic outcomes" (Calder and Staw, 1975, quoted in Campbell and Pritchard, 1976: 104). Hence, we used an incentive measure that captures how controlling a set of incentives is on the individual. In general, incentives that are less frequent and less contingent on individual performance are perceived to be less controlling. Assuming intrinsic motivation theory is correct (Deci, 1972; Ryan, 1982), the less controlling the incentive is perceived to be, the greater the increase in morale it will engender.

The WCM data included the types of incentives available to plant workers: piece rate, individual merit pay, group incentives, and profit sharing. Table 4 shows how the scale of incentive control was formed from the four types of incentives in place at the plants. No incentives at all is the least controlling (Table 4, row 14), while using only a piece rate is the most controlling incentive (row 1), followed by individual merit pay (row 2). Having group incentives or company-wide profit sharing (rows 12, 13) is much less controlling. In between these measures, the authors theorized that a mix of incentives would "dilute" the controlling nature of an individual incentive like piece rate or individual merit pay. The more incentives, the more the controlling nature would be diluted. Further, a group or company-based incentive would more strongly dilute the controlling nature of the individual incentive than would another individual incentive.

Because management controls separated into three constructs, we have three opportunities to test Hypothesis 1--with feedback (lA), incentive control (1B), and autonomy (1C). This should improve our overall understanding of the moderating effect of relationship closeness. The direct effects of relationship closeness on morale (H2) may be examined using the same regression model. The specific regression equations modeled were:

(1) H1A/2: [Morale.sub.i] = [[beta].sub.1] [UsvsJA.sub.i] + [[beta].sub.2] [UsvsIT.sub.i] + [[beta].sub.3] [Feedback.sub.i] + [[beta].sub.4] [Relation.sub.i] + [[beta].sub.5] [Feedback.sub.1] [*Relation.sub.i] + [[epsilon].sub.i]

(2) H1B/2: [Morale.sub.i] = [[beta].sub.1] [USvsJA.sub.i] + [[beta].sub.2] [UsvsIT.sub.i] + [[beta].sub.3] [Autonomy.sub.i] + [[beta].sub.4] [Relation.sub.i] + [[beta].sub.5] [Autonomy.sub.i] [*Relation.sub.i] + [[epsilon].sub.i]

(3) H1C/2: [Morale.sub.i] = [[beta].sub.1] [USvsJA.sub.i] + [[beta].sub.2] [USvsIT.sub.i] + [[beta].sub.3] [Incent.sub.i] + [[beta].sub.4] [Relation.sub.i] + [[beta].sub.5] [Incent.sub.i] [*Relation.sub.i] + [[epsilon].sub.i]

(4) H3: [Harmonious.sub.i] = [[beta].sub.1] [USvsJA.sub.i] + [[beta].sub.2] [USvsIT.sub.i] + [[beta].sub.3] [Relation.sub.i] + [[beta].sub.4] [Morale.sub.i] + [[epsilon].sub.i] where,

[Morale.sub.i] = Employee Morale in plant i

[USvsJA.sub.i] = USA versus Japan (control variable)

[USvsIT.sub.i] = USA versus Italy (control variable)

[Feedback.sub.i] = Feedback from management in plant i

[Relation.sub.i] = Relationship Closeness in plant i

[Autonomy.sub.i] = Autonomy perceived in plant i

[Incent.sub.i] = Incentive Control in plant i

[Harmonious.sub.i] = Perceived Harmonious Teamwork in plant i.


Overall, the results support the hypotheses. We will report the results of Hypotheses 1 and 2 by feedback, incentive control, and autonomy. Then we report the Hypothesis 3 results.


Supporting Hypothesis 1 (Table 5lA), the interaction between feedback and relationship closeness was significant in the first equation ([beta] = .329; p = .000), meaning that relationship closeness moderates the effects of feedback on morale. Feedback was not significant by itself. Supporting Hypothesis 2 (that relationship closeness related directly to morale), relationship closeness was highly significant in this equation at [beta] = .755. Feedback by itself was not significant, meaning it did not directly relate to morale. Thus, feedback was only related to morale in conjunction with relationship closeness. The nationality covariates were also highly significant in this equation at [beta] = -.801 and .248. The first beta (for 'UsvsJA') means morale was considerably lower among Japanese plants than among U. S. plants, while the second beta (for 'UsvsIT') means that average morale was somewhat higher for Italian than for U. S. plants. The lower morale scores for Japan may be due to a tendency to provide mode st responses. The equation [R.sup.2] indicates that 44.4% of model variance is explained by the antecedent variables.


Supporting Hypothesis 1 (Table 51B), the interaction term between autonomy and relationship closeness was significant ([beta] = .258; p = .003). Autonomy was not itself significant in this equation. Supporting Hypothesis 2, relationship closeness was highly significant at [beta] = .700. The nationality covariates were highly significant at [beta] = - .722 and .283. The country figures may be interpreted the same as for feedback. The model antecedents explained 40.7% of the variance in morale. Again, this means that autonomy only affected morale through a close relationship.

Incentive control

Hypothesis 1 was again supported, in that the interaction between incentive control and relationship closeness was slightly significant in the equation ([beta] = .166; p = .064; see Table 5- 1C). Incentive control was not significant Hypothesis 2 was also supported, in that relationship closeness was significant in the equation explaining morale ([beta] .722; p .000). The model [R.sup.2] of .371 indicated that it was quite explanatory. The covariates were both significant. Together, these results mean that incentive control only related to morale through relationship closeness, which again strongly affected morale by itself.

Hypothesis 3

This hypothesis was also strongly supported (Table 5), with an [R.sup.2] of .535. Both relationship closeness ([beta] = .752; p = .000) and employee morale ([beta] = .291; p = .001) were significant antecedents of perceived harmonious teamwork. Neither country covariate was significant here, meaning that perceived harmonious teamwork did not vary greatly by country.


In each of the equations for Hypotheses 1-2, employee-management relationship closeness was highly significant. As expected, none of the management controls affected morale by itself, but affected morale in conjunction with relationship closeness. These results support the proposition that relationship closeness moderates the effects on employee morale of three commonly used management controls. Only when accompanied by a close relationship did feedback, incentive control, and autonomy positively affect morale. We suggest that relationship closeness may be a moderating variable that helps explain why researchers have had inconsistent results when they posited, for instance, that feedback improves performance (Kopelman, 1986).

These results also show significant evidence that superior/subordinate relationship closeness itself has a strong positive relation with employee morale. This is consistent with other findings. For example, Cook and Wall (1980) found faith in management (similar to relationship closeness) to be correlated with organizational commitment (a morale indicator) at r = .61.

Interpreting the study's results in light of other research provides some additional insights. Feedback, for example, has been found to be effective only when certain conditions hold (Kopelman, 1986). Information itself does not motivate, but information about one's performance, when one feels responsible for that performance, does motivate (Hackman and Oldham, 1976). This is because one feels greater self-esteem when feedback says one is performing well (Kopelman, 1986). Feeling good about oneself improves one's morale. In light of our results, perhaps a close relationship with management helps one feel good about oneself. One with a close relationship with management would interpret even negative feedback in a positive way, such that one's self-esteem would be enhanced, not threatened. Hence, feedback within a close relationship improves morale.

Likewise, autonomy can promote employee morale by communicating that workers perform well enough in their work that they can make work decisions on their own. Hackman and Oldham (1975) found that autonomy induces felt responsibility in an employee, which, in turn, is positively associated with such morale-like outcomes as job satisfaction and intrinsic motivation. Autonomy without a close relationship may not help morale because it may feel like one is "given just enough rope to hang oneself," or it may be interpreted as a case in which the boss is simply not interested in what one is doing. Hence, relationship closeness moderates the autonomy [right arrow] control equation.

A controlling incentive may not work without a close relationship because workers in such a relationship would not trust management. Thus, they would feel that by using incentives, management is simply having them chase the proverbial carrot on a stick (Kohn, 1993a), which would lower morale. Consequently, some have found that pay plans or merit pay systems work best when a close employee-management relationship exists (Lawler, 1971; Steers and Porter, 1979). Hence, having a close relationship makes one feel better about the use of incentive controls.

Obtaining such results from a study with international data is hopefully a sign that the principles expressed in the model are not simply applicable to U. S. organizations. It appears from the results that although country matters, once the country variable is controlled, the motivational impact of relationship closeness is consistent across these cultures. The impact of relationship closeness and morale on harmonious teamwork were also consistent across culture. Future research should address how culture specifically affects the relationships in the model.


Caveats and Limitations of the Study

More research needs to be done to establish the extent to which this study's results are applicable in other areas besides manufacturing, and in other areas of the world besides the U. S., Japan, and Italy. Also, the results must be viewed with caution, as this is a cross-sectional study using regression analysis, and so no causality among concepts is proven. Demonstrating causality would require that the factors on the left portion of the model temporally preceded the outcomes on the right side and that all major plausible alternative explanations are eliminated. In addition, some of the measures are not as strongly internally consistent as others, so this also needs to be taken into consideration. Additional studies like this should also be done at the individual level of analysis. Because the proposed management control concept did not prove cohesive, we cannot generalize from this study to management controls. The results do, however, have implications for incentive control and feedback, which are often c onsidered types of managerial controls, and for autonomy. Regarding other controls, we can only speculate.

Implications for Research

The main implication for management researchers is that they should take into account the existing contextual relationship between managers and employees in studies of the effects of feedback, autonomy, and incentive controls. The relationship should help explain some of the effects on morale of feedback, autonomy, and incentive controls. For example, those who study the morale/ motivational impacts of incentives should measure, as a moderator, employee-manager relationship closeness as well. This study's results imply that Granovetter was correct in arguing that researchers need to take a balanced approach that considers not only control and authority structures, but also "social connections within firms" (1985: 501). More recently, at least two researchers have concluded from empirical findings that social relationships help formal controls work better (Kirsch, 1997; Ramus and Steger, 2000). It is also probable, with today's flatter organization structure, that relationship closeness with one's peers may al so affect employee morale. This should be researched. Scholars should also study the effects of national culture on morale.

Implications for Management Practice: Morale-related Decisions

This study brings management controls like feedback, autonomy, and incentives into a natural and useful juxtaposition with human relations methods. Managers should not choose between such managerial controls and human relations methods. Instead, employee-management relationship closeness (in terms of interaction, sharing of management plans, and egalitarianism) appears to be a key to consistent success with feedback, autonomy, and incentive controls. Therefore, managers considering use of these controls should do so in the context of their relationship closeness with employees. For example, if management shares plans and interacts often with employees, the results of this study suggest that a feedback or incentive or participative management control will be successful in motivating employees. If the relationship is not close, these controls may do more harm than good. Relationship closeness via egalitarianism, communication of plans, and interaction will also have a large positive effect on such aspects of mo rale as pride in work and organizational commitment, which, in turn, relate to employee loyalty, as others have found (Fox, 1974).

Further, employee-management relationship closeness and employee morale will yield greater perceived harmonious teamwork. Hence, managers should be trained to develop a closer relationship with workers. In this study, a close relationship embodies management effectively communicating its plans, interacting with workers, and maintaining an egalitarian environment. A close relationship may counter some of the negative side effects of controls. The relationship side should be emphasized at least as much as the control side, because, as Handy concluded, "too much control is expensive, time-consuming, and self-defeating in motivational terms" (1993: 332). Efforts to build relationships and to treat workers as equals will help motivate them. The need for such a close relationship between management and workers cannot be emphasized enough, for example, for organizations employing just-in-time and quality management practices, where success hinges on harmonious teamwork (Flynn et al., 1995).

More generally, this study helps managers understand how relationship closeness helps make incentive control, feedback, and autonomy effective. The three relationship closeness variables used in this study - communication of plans, management-employee interaction, and egalitarianism - have specific implications for management. Based on the strong effects of relationship closeness on morale in our study, we recommend that managers take these steps corresponding to the three constructs: 1) share their plans and strategies with employees, 2) interact with employees frequently in a face-to-face manner, and 3) remove the structural barriers that create social distance between management and workers. Based on our results, these steps alone will have significant potential for improving morale and harmonious teamwork in the organization.

(*.) The authors wish to thank the editor in chief and two reviewers for their helpful suggestions.


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Table 1

Rater Categorization of Items to Construct Definitions

Construct Item Wording in Proposed

Feedback I am never told whether I am doing 100
 a good job.

 My manager never comments about the 88
 quality of my work.

Autonomy Any decision I make has to have my 81
 boss's approval.

 There can be little action taken 81
 here until a supervisor approves
 a decision.

 This plant is a good place for a 100
 person who likes to make his/her
 own decisions.

Egalitarianism Do direct laborers wear uniforms at 46
 this plant?

 Do management and staff wear 60
 uniforms at this plant?

Communication of Plans In our plant, goals, objectives and 86
 stategies are communicated to me.

 I understand the long-run 95
 competitive stategy of this plant.

Management-Employee Managers in this plant believe in 81
Interaction using a lot of face-to-face

 The plant manager is seen on the 64
 shop floor almost every day.

 Managers are readily available on 69
 the shop floor when they are

Pride in Work I like to feel a sense of pride in 100
 my work.

 Working on my job gives me a sense 100
 of satisfaction.

 If I do a sloppy job at work, I 90
 feel a little ashamed of myself.

Organizat'l Commitment I would accept almost any type of 71
 job assignmen in order to keep
 working for this organization.

 I am extremely glad that I chose 73
 this organization to work for
 over others I was considering at
 the time I joined.

 I am proud to tell others that I am 59
 part of this organization.

Cooperation in Plant Departments within the plant seem 49
 to be in constant contact.

 Management works together well on 55
 all important decisions.

 Generally speaking, everyone in the 81
 plant works well together.

Integration of Units The functions in our company work 83
 well together.

 The functions of our firm are well 88

 Marketing and Finance know a great 88
 deal about manufacturing.

Team Problem Solving During problem-solving sessions, we 81
 make an effort to get all team
 members' opinions and ideas before
 making a decision.

 Employee teams are encouraged to 98
 try to solve their problems as
 much as possible.

 In the past three years, many 98
 problems have been solved through
 small group sessions.

 Average of all Items 80

Construct Next Highest %

Feedback --


Autonomy 12-Interaction



Egalitarianism 32-Other


Communication of Plans 7-Feedback


Management-Employee 12-Egalitar.



Pride in Work --


 5-Org Comm.

Organizat'l Commitment 19-Pride in Work

 24-Pride in Work

 39-Pride in Work

Cooperation in Plant 46-Integration


 10-Org Comm.

Integration of Units 14-Cooperation



Team Problem Solving 12-Cooperation



Table 2

Rater Categorization of Constructs to Concept Definitions

Second- Categorized
Order Construct Wording in Proposed
Concept Concept

Management Feedback 49
Controls Autonomy 71
 Incentives 91

Employee- Egalitarianism 95
Management Communication of Plans 69
Relationship Management/Employee 95
Closeness Interaction

Employee Pride in Work 98
Morale Organizational Commitment 79

Perceived Cooperation in Plant 85
Harmonious Integration of Units 79
Teamwork Team Problem Solving 100

 Average of all Items 83

Order Next Highest
Concept %

Management 44-Relationship.
Controls 12-Morale

Employee- 2-Teamwork.
Management 17-Mgt. Ctl.
Relationship 5-Mgt. Ctl.

Employee 2-Relationship.
Morale 12-Relationship.

Perceived 5-Relationship.
Harmonious 12-Mgt. Ctl.
Teamwork --

Table 3

Internal Consistency Reliability of Individual Constructs

A. Construct Level

High-Level Concept Construct # of Items

Management Controls Feedback 2
 Autonomy 4

Employee- Management/Employee 4
Management Communication of Plans 3
Relationship Closeness Egalitarianism 2

Employee Morale Organizational Commitment 7
 Pride in Work 5

Perceived Harmonious Cooperation in Plant 4
Teamwork Team Problem Solving 5
 Integration of Units 3

B. Concept Level
Management Controls 3

Employee- 3
Relationship Closeness

Employee Morale 2

Perceived Harmonious 3

High-Level Concept Cronbach's

Management Controls .66

Employee- .71

Management .92
Relationship Closeness .68

Employee Morale .86

Perceived Harmonious .75
Teamwork .90

B. Concept Level
Management Controls .42

Employee- .75
Relationship Closeness

Employee Morale .59

Perceived Harmonious .76
Table 4

Derivation of Degree of Incentive Control

 Degree of Row/ # # #
 Incentive Score Japan U.S. Italy

Controlling 1 1 - -
 2 - 8 18
 3 1 - 3
 4 3 - -
 5 2 - -
 6 - - 3
 7 - 7 -
 8 - - 3
 9 29 1 -
 10 1 - -
 11 4 - -
 12 - - 3
 13 - 3 -
 Least 14 - 7 3
 Total: 41 26 33

 Degree of
 Incentive Incentive Controls Used forDirectLabour atPlant

Controlling Piece Rate - -
 - Merit -
 Piece Rate Merit -
 Piece Rate - Group
 Piece Rate - -
 - Merit Group
 - Merit -
 Piece Rate Merit Group
 Piece Rate - Group
 - Merit Group
 Piece Rate Merit Group
 - - Group
 - - -
 Least - - -

 Degree of
 Incentive Incentive
 Controls Used
 r atPlant

Controlling -
 [pi] Sharing
 [pi] Sharing
 [pi] Sharing
 [pi] Sharing
 [pi] Sharing
 [pi] Sharing
 Least -

[pi] Sharing = Profit Sharing


(1.) The total possible combination (16) were collapsed to 14 because no
data points were found for two of the possible combinations. (2.) Degree
of controlling decrease from left (Piece Rate) to right (Profit
Sharing). (3.) Degree of controlling decrease from use of few to many
types of incentives. (3.) Degree of controlling decrease from individual
to group incentives.
Table 5

Results of Regression Analysis

Hypothesis Independent Variables Dependent [R.sub.2]

 Feedback + Feedback X Variable
 Relationship + Relationship + Employee
 USvsJA + USvsIT Morale .444

 Autonomy + Autonomy X
 Relationship + Relationship + Employee
 USvsIA + USvsIT Morale .407

 Incentives + Incentives X
 Relationship + Relationship + Employee
 USvsJA + USvsIT Morale .371

 3 Relationship + Employee Perceived
 Morale + USvsJA + USvsIT Harmonious
 Teamwork .535

Hypothesis Adj.

 [R.sub.2] Variables [beta] p

 .414 Feedback .034 .700
 1A Feedback X Relation .329 .000
 2 Relationship .755 .000
 USvsJA -.801 .000
 USvsIT .248 .020

 .376 Autonomy .084 .386
 1B Autonomy X Relation .258 .003
 2 Relationship .700 .000
 USvsJA -.722 .000
 USvsIT .283 .019

 .337 Incentives .074 .433
 1C Incentives X Relation .166 .064
 2 Relationship .722 .000
 USvsJA -.730 .000
 USvsIT .320 .005
 Relationship .752 .000
 Employee Morale .291 .001
 USvsJA -.062 .614
 USvsIT .077 .430
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Author:McKnight, D. Harrison; Ahmad, Sohel; Schroeder, Roger G.
Publication:Journal of Managerial Issues
Article Type:Statistical Data Included
Geographic Code:1USA
Date:Dec 22, 2001
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