Incentive Redesign and Network Evolution: Performance Implications of Bridging and Bonding Strategies

Incentive Redesign and Network Evolution: Performance Implications of Bridging and Bonding Strategies

• Visiting Assistant Professor of Management Xiaoyun “Aarn” Cao

Abstract:

This study examines how individuals proactively reconfigure their networks in response to incentive redesign and the performance implications of bridging and bonding social networks. We propose that performance-based incentive plans prompt individuals to revise goals and alter social relations. An incentive plan that centers on short-term achievement of individuals’ measurable outputs activates a focus on the self and agency (increased self-sufficiency hypothesis) and impairs communal relationships (dispersed empathy hypothesis). This research was carried out in a privately-owned company located in southeast China, which redesigned its performance management and compensation systems in order to encourage employees to adapt to the new strategic goals and work processes. The findings further validated the notion of incentive-induced network adaptation (Mitsuhashi & Nakamura, 2021, SMJ). Furthermore, this study finds evidence that incentive-induced changes in advice and friendship networks have distinct impacts on individual performance and suggests a new theme to study the effects of incentive redesign.

All Illinois Tech faculty, students, and staff are invited to attend.

The Friday Research Presentations series showcases ongoing academic research projects conducted by Stuart School of Business faculty and students, as well as guest presentations by Stuart alumni, Illinois Tech colleagues, business professionals, and faculty from other leading business schools.