Individual Consequences of Monitoring Under Gainsharing: Expanding Agency Theory Predictions

Abstract

Agency theory suggests that gainsharing produces changes in monitoring within teams, however, the implications of monitoring on individual behavior have not yet been examined. This research expands agency theory by exploring the behavioral implications of peer monitoring under gainsharing. Performance data from both individual workers and managers show that peer monitoring has either zero or positive effects on five categories of individual behavior. However, focus group, interview, and company generated survey data indicate the existence of concealment and perhaps retaliatory behaviors in response to gainsharing.