The Effectiveness of Relative Performance Information and Cultural Controls on Employee Effort in Remote Work Settings

This study examines the effectiveness of two types of management controls in a remote work setting. Because remote employees work outside the traditional office environment, components of conventional management control systems that effectively direct in‐office employees toward organizational objectives may be less effective for remote employees, potentially impairing effort. Using an experimental study with a real‐effort task, we examine the effects of relative performance information (RPI, absent vs. present) and cultural controls (absent vs. present) on remote employees' effort. We first confirm that in the absence of management controls, effort is lower for remote employees than in‐office employees. This finding establishes the existence of an inherent management control problem with respect to remote employees' effort. We then find that both RPI and cultural controls (i.e., controls that shape values, beliefs, and norms) increase the effort of remote employees when used independently. Furthermore, we find that in a remote work setting, RPI and cultural controls do not significantly interact in a complementary or supplementary manner, suggesting that they can be used as substitutes to increase the effort of remote employees. Our study extends existing research by examining how RPI, a management control commonly studied in traditional office settings, interacts with cultural controls to influence remote employees' effort.