Contingent Reward, Regulatory Focus, and Trust

1. Contingent Reward, Regulatory Focus, and Trust Ronald F. Piccolo Rollins College Tomek A. Kosalka University of Central Florida Craig Crossley University of Nebraska

2. 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

3. 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)

4. Source: ISI Web of Science; * 51 articles YTD 2009.

5. 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

6. 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).

7. Model of Relationships Promotion Focus Contingent Reward Performance Trust

8. 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).

9. Measures • Contingent Reward (Bass & Avolio, 1995) • Regulatory Focus (promotion; Wallace & Chen, 2006), a = .77 “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

10. Correlations Note. n = 75 – 81. * p < .05.

11. Regression Results

12. CR x Trust → Promotion

13. 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

14. Conclusions • Original theorizing on augmentation effect of TF: • Transformational adds to (but does not substitute for) the effectiveness of transactional leadership. • Recent empirical results • Validities are similar across criteria. • In many cases, transactional adds to the effectiveness of transformational (e.g., Follower Satisfaction). • Effects of TF & CR are realized through similar mechanisms (e.g., self regulatory focus) • Relationship between CR and Promotion Focus depends on Trust (see also, LMX)

15. 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)

16. 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 

17. Thank You.