Presented in the 5 th Annual International Business Research Forum

1. ACCEPTANCE OF ELECTRONIC MONITORING AND ITS CONSEQUENCES IN DIFFERENT CULTURAL CONTEXTS: A CONCEPTUAL MODEL DARIA PANINA Texas A&M University JOHN R. AIELLO Rutgers University Presented in the 5th Annual International Business Research Forum   Information Technology and International Business Theory and Strategy Development Philadelphia, PA March, 26-27, 2004

2. Introduction & Research Question Recent trend: to outsource marginal organizational functions to developing countries How to ensure that company-wide quality standards are met by foreign subsidiaries and subcontractors?

3. EPM – a Possible Solution Electronic Performance Monitoring (EPM) is “the practice of using computers and/or telecommunication technology to collect, analyze, and report information about employee performance” (U.S. Congress, OTA, 1987) Advantages Disadvantages • Employee stress • Employee dissatisfaction • Emphasis on quantifiable • performance measures • Distance • Cost • Timely feedback • Objective data

4. Objectives of the Paper • Review the evidence on the acceptance and effects of EPM in the USA & other countries • Develop a model of the relationship between national culture, EPM, its acceptance and consequences • Develop a set of propositions regarding culturally acceptable EPM systems to guide further research & practice • Offer recommendations for EPM implementation & design in different cultures

5. EPM and its Features (Aiello &Kolb, 1995) • Target • Pervasiveness • Recipient • Purpose • Concomitant practices

6. Culture & Its Dimensions (Hofstede & Bond, 1988) • Individualism-Collectivism (IND) • Power Distance (PD) • Uncertainty Avoidance (UA) • Masculinity-Femininity (MAS) • Confucian Dynamism (CD)

7. EPM in the USA: • is considered acceptable and leads to positive outcomes when: • it provides objective performance data • it is accompanied by other monitoring techniques to capture all sides of work • it is provided on an individual basis • it is implemented in an employee-friendly work context • tasks are relatively simple

8. Culture, EPM, and its Consequences: Conceptual Model EPM Fairness Perceptions & Control Outcomes EPM • Performance • Stress • Job satisfaction • Commitment • OCB • Target • Pervasiveness • Recipient • Purpose • Concomitant practices EPM Acceptance Culture • Individualism/Collectivism • Uncertainty Avoidance • Power Distance • Masculinity/Femininity • Confucian Dynamism

9. IND – Possible Effects on EPM Acceptability Individualism Collectivism Target Pervasiveness Recipient Purpose Conc. Practices Individual/work products Group/work behaviors Pervasive Pervasive Employee/Supervisor* Work Team/Supervisor* Objective performance measurement/feedback Group performance feedback /informal performance reviews Individual incentives, employee-centered processes Teamwork, group incentives & praise * Depends on the PD

10. Individualism/Collectivism & EPM: Propositions • Individualist cultures are more likely to accept EPM that collects objective and comprehensive data on individual performance for evaluation and development purposes. • Collectivist cultures are more likely to accept EPM that collects comprehensive data on group behaviors for the purposes of improving group performance and as a basis for informal performance reviews.

11. UA – Possible Effects on EPM Acceptability High UA Low UA Individual Individual/Group* Target Pervasiveness Recipient Purpose Conc. Practices Pervasive Pervasive/Non-Pervasive Employee Employee/Group/Supervisor* Monitoring/objective performance measurement General guidance/ feedback Detailed explanation of EPM & data use; visibility of monitoring Goal-setting, pay for performance * Depends on the M/F

12. Uncertainty Avoidance & EPM: Propositions • High UA cultures are more likely to accept individual level EPM by providing immediate electronic feedback & more objective performance data. To be effective, EPM should be explained to employees in detail. • Low UA cultures are less concerned about the ambiguity associated with EPM use and are more likely to accept EPM that provides opportunities for professional growth and that provides general guidance and feedback.

13. PD – Possible Effects on EPM Acceptability High PD Low PD Individual/Group* Individual/Group* Target Pervasiveness Recipient Purpose Conc. Practices Pervasive Non-pervasive Supervisor Employee/Group* Monitoring, performance appraisal, feedback Feedback Bureaucratic controls, top-down decision making Participatory management, worker control, goal setting * Depends on the I/C

14. Power Distance & EPM: Propositions • High PD cultures are more likely to accept EPM if imposed by superiors, especially if accompanied by an autocratic style of management and top-down decision making. • Low PD cultures are more likely to accept EPM if it allows for employee control, participation & ownership.

15. MAS - Possible Effects on EPM Acceptability Masculinity Femininity Individual Target Pervasiveness Recipient Purpose Conc. Practices Group Results Processes Employee/Supervisor Group Objective individual performance measurement Group performance feedback Human-centered production Pay-for-performance

16. Masculinity/ Femininity & EPM: Propositions • Masculine cultures are more likely to accept EPM if it provides objective performance data and leads to higher productivity and competitiveness. • Feminine cultures are more likely to accept EPM if it is used to improve the quality of work life and workers’ competence and de-emphasizes individual competition.

17. CD - Possible Effects on EPM Acceptability High CD Low CD Individual/Group* Target Pervasiveness Recipient Purpose Conc. Practices Individual/ Group* Pervasive/Behaviors Pervasive/Results Individual/Group/Supervisor* Individual/Group/Supervisor* Feedback for increased competence & performance Informal performance reviews Long-term goals; extensive data collection Short-term goals; focus on results * Depends on the PD & IND

18. High/Low Confucian Dynamism & EPM: Propositions • High CD cultures are more likely to accept EPM if it provides comprehensive performance data and assists employees in improving their competence and performance. • Low CD cultures are more likely to accept EPM if it provides performance data that emphasizes short-term results and is accompanied by procedures allowing for saving face.

19. Culture & Perceptions of Fairness • Distributive justice judgments are affected by the choice of the reward distribution rule in a particular culture. EPM should be aligned with reward allocation & relevant as a performance measurement tool. • Procedural justice includes the concept of “voice”. Relationship between EPM and perceptions of its fairness might be moderated by PD. • Informational justice perceptions and information seeking behaviors might be influenced by PD and UA. • Interactional justice judgments might be influenced by IND.

20. Conclusions • Cultural value orientations are stable – to ensure acceptance of new technology, it is advisable to make its implementation and use contingent upon cultural norms • EPM is not a monolythic practice, there is a great deal of variance in its use, thus, cultural adaptations are relatively easy to accomplish • EPM & culture may interact in multiple ways, case-by-case consideration is needed to design a culturally-acceptable EPM system