Running head ENVIRONMENTAL SCIENCE1ENVIRONMENTAL SCIENCE.docx

Running head: ENVIRONMENTAL SCIENCE
1
ENVIRONMENTAL SCIENCE
2
Environmental Science
Student’s Name
University Affiliation
Environmental Science
Environmental science part 1
1page Define stewardship and define sustainability.
Stewardship of the ecosystem refers to a framework that is
action-oriented and that seeks to develop the sustainability of
the socio-ecological environment of a planet that is rapidly
changing planet. It considers the means through which the
resources availed by the environment are managed with the
intent of ensuring they are not wasted or exhausted.
Sustainability on the other hand refers to the facilitation of
current needs by using the environment without jeopardizing
future generations’ ability to meet their needs.
Considering the Amazon forest, there are several considerations
that can be made in light of the stewardship and sustainable
utilization of the resource. To begin with, it is imperative that
Amazon resource are conserved by being included as a
conservation reserve and marked for protection and
sustainability. Additionally, it could be placed under a covenant

of conservation. There should also be an inventory of the
natural resources in the Amazon including a comprehensive
inventory of the biological resources found in the forest and
which should be monitored within regular intervals.
Additionally, there should be increased research on the
identification of maintenance procedures of proper biological
and physical processes from the forest. There should also be
policies set that determine the sustainable utilization of timber
from the Amazon rainforest according to proper standards that
will ensure that future generations use of the same is not
endangered (Chapin III & Matson, 2011).
The environmental implications that can arise as a result of
deforestation of the Amazon forest are innumerable. To begin
with animals dependent on the forest would find it difficult to
survive and, therefore, may become extinct. This would make
them unavailable for future generations. Additionally,
deforestation leads to an imbalance between the carbon dioxide:
oxygen ratio in the atmosphere. As a result, air pollution will
become aggravated.
PART 2
Ecosystems and How They Work - Sustainable Development
close
In this assignment, you will investigate the biotic and abiotic
structure and function of an ecosystem. Choose one of the
following ecosystems:
Tropical rainforest
An ecosystem refers to a correlated community of both living
and non-living organisms and the environment in which they are
found. It comprises an abiotic and biotic component. For this
discussion the ecosystem chosen is a tropical rainforest. The
biome of a rainforest is highly complex as it comprises a myriad

of various plant and animal species which are adapted to
surviving under rainy conditions. An example is the Amazon
rainforest. In the rainforest ecosystem there exist various plant
levels, with the highest being the tall trees that form a canopy.
Then there are vines, epiphytes and orchids which grow on the
higher parts of the trees in order to obtain sunlight on the lower
levels are the ferns and short trees are found on the forest floor
and, are adapted to photosynthesize under low light intensity.
Within the rainforest the animals are as diverse as the plant life,
ranging from insects, snakes and numerous bird species. Water
points within the rainforest also host numerous other aquatic
animals and plants. Within the rainforest, there are biotic and
abiotic factors that interact with each other in a biogeochemical
cycle to ensure their survival. The biotic components of the
rainforests include all the living organisms in the ecosystem
while the abiotic include all the nonliving components of the
ecosystem. The abiotic factors include temperature, wind,
water, soil and natural disasters. Temperature greatly affects the
metabolic processes of the living organisms in the rainforest.
Water affects the homeostatic balance of the organisms and has
other uses that ensure the survival of the living organisms.
Light, on the other hand, provides the energy necessary to drive
core processes such as photosynthesis. Soil provides a habitat
for some animals, while its provides a source for minerals and
support to plants. Natural disasters such as forest fore,
typhoons and hurricanes result in the death of numerous
organisms, inadvertently reducing the competition or even
leading to extinction.
The biosphere provides a crucial exchange point in its
interaction with the lithosphere. It participates in major
processes of the ecosystem that serves to drive the major
biogeochemical cycling processes. Processes within the
ecosystem are largely dynamic and undergo seasonal cycles that
are dynamic and that respond to the changes in radiation of
solar. This results in variations in the primary productivity as

well as different energy amounts from the photosynthetic
process and carbon dioxide fixation into materials that are
organic. This results in yearly variability of the carbon cycle.
The carbon cycle is the largest and most expansive of all the
biogeochemical processes. The fixated carbon found in plants
changes into food to be consumed by plant consumers as well as
decomposers. These then undertake the process of carbon
degradation into a form that has less energy and finally, the
photosynthesis fixed carbon is released back into the
atmosphere, thereby completing the carbon cycle. The
biogeochemical nitrogen cycling is also energy intensive.
Bacteria are involved in fixing atmospheric nitrogen gas into
forms that are reactive and useful to other living organisms
(Elbert, Weber, Burrows, Steinkamp, Büdel, Andreae,, &
Pöschl, 2012).
Disturbance refers to the process that results in an alteration in
the ecosystem. This alteration has negative effects to the
rainforest ecosystem and can be both artificial and natural. A
human disturbance can be caused by massive deforestation. This
results in the removal of an important part of the rainforest
ecosystem, the trees. A natural disturbance may include a
typhoon or a hurricane which ultimately results in the
destruction of the trees and other components of the ecosystem.
If left to recover, the ecosystem applies several mechanisms
such as the re-growth of new trees. However, the process takes
a considerable amount of time to recover to the originals state.
It is, therefore, imperative that governments and other
organizations initiate processes that ensure such ecosystems are
protected against such destructive disturbances, especially
human caused disturbances.
References
Chapin III, F. S., & Matson, P. A. (2011). Principles of
terrestrial ecosystem ecology: Springer.

Elbert, W., Weber, B., Burrows, S., Steinkamp, J., Büdel, B.,
Andreae, M. O., & Pöschl, U. (2012). Contribution of
cryptogamic covers to the global cycles of carbon and nitrogen.
Nature Geoscience, 5(7), 459-462.
Watson, W.E., Johnson, L., & Merritt, D. (1998). Team
Orientation, Self-Orientation, and Diversity in Task Groups.
Group & Organization Management, 23, 161-188.
Introduction
The success of group effort is a complex issue, and research has
demonstrated tasks on which an individual’s effort is superior to
group effort. The likelihood of the group performing better
than the best individual increases when the problem has
multiple parts, no one member has all the information
necessary, the problem is at least moderately complex,
interdependence is necessary, and there is enough time for
members to process information.
Self-oriented behaviors (SOBs) are those that individuals
exhibit as mechanisms for the defining and redefining roles in a
group.
Purpose
The purpose of this study is to investigate the relationship of
interpersonal processes, diversity, and team performance.
Research to aid our understanding of the complexity of diversity
and its impact on team performance is in the very early stages,
and the examination of work-group processes, diversity, and
performance over time has been investigated very little.
Hypotheses
· (H1) Early on, culturally diverse teams will perform more

effectively on complex, longer-duration tasks than will
culturally nondiverse teams.
· (H2) Later in a team’s life cycle, after periodic feedback
regarding team and self-issues, the culturally diverse teams will
not perform more effectively than culturally nondiverse teams.
· (H3) Over time, culturally diverse groups will report TOBs
and SOBs similar to that of culturally nondiverse teams.
Method
Two samples of students were used, taken from different
semesters at the same university in the Southwestern US. Each
sample comprised students involved in an upper level basic
management course in which students were members of the
same team throughout the semester. Both samples attended
classes in which a significant portion of their final evaluation
was calculated from team project performance.
Sample 1
· 226 participants (125 males, 101 females)
· Work groups consisted of 4 or 5 members.
· Projects involved four realistic case studies of business
problems.Sample 2
· 449 participants (234 males, 215 females)
· Work groups consisted of 4 to 6 members.
· Used different types of team projects.Measures
The instrument administered was the Group Style Instrument
(GSI), which is a 26-item survey describing critical group
member process activities that affect team productivity.
Participants were asked to complete the GSI according to
observations that they have made about their team in this class.
Data were gathered from three group tasks given at

approximately 5-week intervals.
Dependent Variables
· The team’s score for that particular 5-week time period.
Independent Variables
· Demographic variables
· Type of team diversity
· Group-style dimensions of TOBs and SOBs.
Results
The finding that diverse teams did better over the first two time
periods supported H1. H2 was also supported, because the
culturally nondiverse teams performed better at Time 3. At
Time 1, diverse groups and their team orientation predicted
team performance. By Time 2, members in groups that reported
high self-orientation in Time 1 predicted team performance. By
Time 3, nondiverse groups who reported significant team
orientation did better. Clearly, there are cyclical effects and
significant relations among the elements of team orientation,
self-orientation, diversity, and team performance.
Conclusion
This study contained several limitations; first, student groups
were used and therefore could operate differently than ongoing
teams in organizations. In addition, even though the project
extended across 4 months, that is not enough time to evaluate
the more lengthy cycles that teams will experience. An even
longer time frame should be researched. For future extensions
of this type of research, the authors encourage the examination
of a broader spectrum of task types and team types.

Hogg, M.A. & Turner, J.C. (1987). Social Identity and
Conformity: A Theory of Referent Information Influence. In
Doise, W., & Moscovici, S. (Eds.) Current Issues in European
Social Psychology, Volume 2. (pp.139-182). New York:
Cambridge.
Introduction
Early research into the emergence, persistence and influence of
social norms indicates that conformity and norms are closely
interrelated. A norm, as a social uniformity, is an emergent
product of social interaction which appears to transcend the
existence of specific individuals. Conformity is affected by the
size, attractiveness, and unanimity of the group. The authors
suggest three major sources of influence upon conformity.
Three Major Sources of Influence
The normative clarity and relevance of the group; that is the
extent to which the behavior of the group conveys a distinct and
reliable group norm which distinguishes it from other groups.
The second source of conformity resides in the individual’s
relationship to the group, which determines whether he chooses
to respond to the group as a source of influence. The third
influence on conformity stems from the individual’s
relationship to the stimulus. Being in a situation where one
would tend to expect a degree of agreement with others
concerning the stimulus, or how to behave, and yet encountering
disagreement, creates a feeling of subjective uncertainty
concerning the objective validity or appropriateness of one’s
perceptions, judgements, opinions, or behaviors.
Traditional Model
The traditional model of conformity is a two process
dependence formulation, which is considered to explain all
variables involved in conformity. It treats people as dependent

on each other for social acceptance and approval, and for
validation of beliefs, perceptions, and judgements which cannot
be tested against physical reality. One limitation of the two
process model is that conformity can still occur under
conditions in which neither normative nor informational
influence would be expected to operate.
Two Approaches
The social identity approach makes a qualitative distinction
between group and individual at the level of overt behavior,
self-conceptualization and underlying psychological processes,
and employs a cognitive definition of the social group as ‘two
or more individuals who share a common social identification of
themselves or … perceive themselves to be members of the
same social category’.
Intragroup consensus, agreement and uniformity are generated
by distinct form of social influence responsible for conformity
to group norms, called referent informational influence. This
occurs in three stages: first, individuals categorize and define
themselves as members of a distinct social category or assign
themselves a social identity; second, they form or learn the
stereotypic norms of that category. Finally, they assign these
norms to themselves and thus their behavior becomes more
normative as their category membership becomes salient.
Empirical Studies
The authors lend empirical weight to referent informational
theory through several experiments. Taken together, they show
that conformity represents private acceptance of a norm which
defines or is stereotypic of a group with which the individual
identifies on the basis of explicit categorization, or implicit
categorization based on self-inclusion in the group’s response

distribution. Conformity appears to represent true change rather
than behavioral compliance, because it persists in the absence
of surveillance by the group or feedback of the group’s
responses. Group polarization is the tendency for individuals’
attitudes, judgements, decisions, etc. to shift, following group
discussion, in the direction already favored by the group so that
the post-discussion consensus is more extreme than the mean of
the individual pretest responses.
Conclusion
The research described in this chapter represents a gradual
accumulation of evidence favoring referent informational
influence theory as an explanation of conformity. Identification
seems to be an important precondition for conformity, as is the
existence of a distinct ingroup norm. Although referent
informational influence theory still needs to accumulate more
empirical support to swell its data base, this deficiency is not
due to the accretion of antagonistic findings. Rather, it is
simply that there are, to date, only a relatively small number of
studies which have systematically put the theory to the test.
Are human resource practices linked to employee misconduct?
A rational choice perspective
James Werbel a,1, David B. Balkin b,c,!
a College of Business, Iowa State University, Ames, Iowa
50010, United States
b Leeds School of Business, University of Colorado, Boulder,
CO 80309, United States
c Institute for Labor Studies (IEL), ESADE Business School,
Barcelona, Spain

a r t i c l e i n f o a b s t r a c t
This paper explains how well intended HR practices associated
with performance appraisal and
compensation can be linked to employee misconduct. Based on
a rational choice perspective to
ethical behavior, different types of HR con!gurations are likely
to either increase the perceived
costs or bene!ts of employee misconduct. This paper links
speci!c HR con!gurations with both
perceived costs and bene!ts of employee misconduct. Finally,
this paper concludes with
recommendations that are designed to promote both effective
job performance and minimize
problems of employee misconduct.
© 2009 Elsevier Inc. All rights reserved.
Keywords:
Performance appraisal
Compensation
Ethics
Employee misconduct
“The Road to Hell is paved with good intentions” Samuel
Johnson, 1775
1. Introduction
The breadth of high pro!le cases of criminal behavior and
misconduct in contemporary American, European (Knights &
O'Leary, 2005), and Asian (Sang-Hun, 2007) businesses has
received signi!cant attention in both the academic literature and
the
popular press (Baucus & Baucus, 1997; Baucus & Near, 1991).
The court convictions of executives engaged in criminal

behavior
that occurred at companies such as Enron, Adelphia, Parmalat,
and Samsung have broad social impacts associated with the
collapse
or decline of these !rms. The more recent cases in the collapse
of !nancial giants such as AIG and Merrill Lynch, suggest that
misconduct persists and appears to be a chronic problem. The
misconduct can adversely affect numerous stakeholders such as
employees, stockholders, creditors, and customers (Hooker,
2009).
The issue of misconduct within companies leads to the question,
“Why do employees engage in misconduct?” The typical white
collar person who engages in misconduct is a middle aged white
male. White collar, middle aged white males would not
normally
fall into your stereotypes of people who engage in illegal
behavior. Furthermore, these actions occur in spite of control
systems
such as codes of ethics, toll free numbers to anonymously report
inappropriate actions, managerial oversight, and sophisticated
internal auditing practices that are intended to reduce illegal
behavior. Previous research suggests that individual differences
(see
O'Fallon & Butter!eld, 2005 for a recent literature review)
including demographic variables such as gender (McCabe,
Ingram, &
Dato-on, 2006), personality traits (Greenberg, 2002), and stages
of moral development (Greenberg, 2002) in"uence misconduct.
Research also suggests that organizational contexts such as
codes of ethics (Schwartz, 2001; Beu & Buckley, 2004),
leadership and
Human Resource Management Review 20 (2010) 317–326
! Corresponding author. Leeds School of Business, University

of Colorado, Boulder, CO 80309, United States. Tel.: +1 303
492 5780.
E-mail addresses: [email protected] (J. Werbel),
[email protected] (D.B. Balkin).
1 Tel.: +1 515 294 8423.
1053-4822/$ – see front matter © 2009 Elsevier Inc. All rights
reserved.
doi:10.1016/j.hrmr.2009.10.002
Contents lists available at ScienceDirect
Human Resource Management Review
journal homepage: www.elsevier.com/locate/humres
management (Grojean, Resick, Dickson, & Smith, 2004), and
organizational culture or norms (Ashforth & Anand, 2003)
in"uence
misconduct.
While acknowledging the signi!cance of earlier research as both
individual differences and organizational contexts shape
misconduct, this paper proposes a model of misconduct that
focuses on human resource management practices as a seldom
examined antecedent of misconduct. Accordingly, the primary
contribution of this paper is to link speci!c and well intended
HR
practices associated with both performance appraisal and
compensation as an organizational context that shapes
misconduct. This
goes beyond existing approaches that link the generic
importance of HR functions with misconduct (James, 2000;

Buckley et al.,
2001; McDevitt, Giapponi, & Tromley, 2007) by suggesting that
!rms need to carefully examine the potential effects of different
HR
compensation and performance appraisal practices. For
example, it has been suggested that certain reward systems such
as sales
commission plans and large cash bonuses may encourage people
to engage in misconduct (Gomez-Mejia & Balkin, 1992). This
statement is overly simplistic because reward systems vary
signi!cantly. Perhaps, different design features of incentive
systems
are likely to create misconduct.
This paper !rst examines the construct of employee misconduct.
It then demonstrates how HR practices can in"uence the
perceived costs and bene!ts of actions that lead to employee
misconduct. Finally, it discusses alternative ways to structure
HR
practices to minimize the potential of employee misconduct.
2. Employee misconduct
Numerous terms have been used to describe unethical behavior
in organizations. A broad category of literature on unethical
behavior focuses on organizational deviance (Robinson &
Bennet, 1995; O'Leary-Kelly, Grif!n, & Glew, 1996; Robinson
& O'Leary-
Kelly, 1998) or organizational misbehavior (Vardi & Weitz,
2004). This includes severe behaviors such as aggressive,
violent, or
passive aggressive behaviors such as bullying, assault, and
harassment. They may also include behaviors such as
embezzlement.
Another category of research on unethical behavior focuses on

employee misconduct (Kidder, 2005). Employee misconduct
includes a more limited range of unethical behaviors that are
related to corporate wrongdoing that often gets highlighted in
the
media. Examples of these were mentioned earlier. Thus, this
type of unethical behavior commonly involves actions that
entail
violations of socially prescribed behavior. It includes practices
such as accounting irregularities, churning customer accounts,
inappropriate management of overtime policies, having obvious
con"icts of interests such as giving inappropriate gifts to a
client,
or using company property for personal purposes. Employee
misconduct can often occur when employees are aiming at
meeting
expected performance objectives but decide to use questionable
means to achieve those objectives. Therefore, we differentiate
employee misconduct from other forms of organizational
deviance by limiting it to behaviors that an employee enacts
while
performing his or her job without intending malice to other
parties or the organization.
Thus, employee misconduct is different from ethical actions
linked to social responsibility that entails a broader range of
proscriptive actions to manage the needs of different
stakeholders. In contrast, employee misconduct relates to how
people ought
to behave in light of professional standards for doing business
(Buckley et al., 2001). This can involve committing an
infraction of a
company rule such as committing dishonesty when booking the
date of a sales transaction in order to achieve a sales quota. It
can
also involve violating a federal customs rule such as attempting
to sneak through U.S. customs some contraband Cuban cigars in

order to please clients that one is trying to impress. In these
situations, an employee is focused on performance and in the
process
breaks a company rule, a law or ethical principle leading to
misconduct.
While the broader scope of organizational deviance and the
narrower focus of employee misconduct are both important, we
focus on employee misconduct in this paper for two reasons. In
particular, we believe that HR and its performance management
system may devote too much emphasis of an employee's
attention on one goal such as sales revenues and too little
attention on
other goals such as good customer service, so that misconduct
results when customers complain about how they are treated by
aggressive sales people.
Secondly we focus on misconduct because it is often subjected
to media attention. Acts of misconduct often violate social
expectations in the name of greed or self-interest. The public
disclosure of employee misconduct may harm an organization's
goodwill with customers, suppliers and other important parties
(Vogel, 2005). Bankers who sold sub-prime loans for houses to
customers with poor credit histories and who later had their
home foreclosed have harmed the bank's reputation for being a
good
standing member of the community that it serves. The bankers
in this example did not seek to harm the customers who were
sold
the sub-prime loans and had their houses foreclosed, rather they
were seeking pro!ts for the bank and the pay incentives that
were linked to bank pro!ts.
This paper assumes that employee misconduct is a multilevel
construct (see Ashforth, Gioia, Robinson, & Trevino, 2008).
That

is, misconduct occurs in an organizational context and it shapes
individual behavior. Both individual and organization factors
contribute to the occurrence of misconduct. Thus, we believe a
cross level analysis is important to investigate at both the
organizational and individual levels of analysis. Additionally,
we assume that performance criteria are set at reasonable levels
and
employees are given some discretion in the ways they choose to
achieve pre-established performance goals. Our focus is on the
choices that employees make in how they perform under
different performance appraisal and compensation practices.
3. Performance management systems and misconduct
Fig. 1 indicates the HR practices and the organizational and
individual intervening variables that contribute to employee
misconduct. Certain types of compensation practices make
misconduct more likely to occur at an individual level. On an
318 J. Werbel, D.B. Balkin / Human Resource Management
Review 20 (2010) 317–326
organizational level, the rewards provided to those who engage
in misconduct while exceeding their performance goals send a
symbolic message to other employees that legitimate the
misconduct and make it more attractive to other individuals.
Furthermore, the legitimation process may also spill over to
reduce the fear of being caught as the organization has
communicated
at best an indifferent attitude towards misconduct. A vivid
example of the organizational effects of rewarding employee
misconduct is provided by Andrew Fastow, the CFO of Enron,
who at one time was considered to be a hero within the Enron
culture for developing innovative !nancial deals that enriched

the !rm as well as himself. Unfortunately, other Enron
executives
were in"uenced by Fastow, who eventually received a prison
sentence for his misconduct.
Performance appraisal practices that focus on outcomes
exclusively (with little attention given to behaviors) can
intensify the
information asymmetry between supervisors and subordinates.
Supervisors may have minimal knowledge of how subordinates
achieve their performance outcomes since they are not required
to monitor employee behavior and provide behavioral feedback
in
an outcome based performance appraisal system. Subordinates
can take advantage of their greater level of job knowledge by
engaging in questionable work practices that lead to desired
work outcomes. Information asymmetry is likely to create
dysfunctions within a social system as feedback loops are
incomplete (Jensen & Meckling, 1976). The incomplete
feedback loop is
likely to promote this disparity.
Fig. 1 suggests that at the individual level of analysis,
employees approach misconduct rationally by considering the
opportunities to be gained from misconduct (rewards/incentives)
compared to the fear of being caught (performance
assessment). When the expected bene!ts exceed the expectations
of being caught, individuals will be prone to engage in
misconduct. This is compatible with others who have also
proposed that rational choice perspective pervades both ethical
behavior (Kidder, 2005; Chiou, Huang, & Lee, 2005; Smith,
Simpson, & Huang, 2007) and criminal behavior. This
perspective
assumes that individuals will weigh the costs and bene!ts of an
action that entails misconduct and that misconduct is likely to
occur when it serves the self-interest of the perpetrator (Beu &

Buckley, 2004). Both incentives and deterrence are important
elements to this perspective (Smith, Simpson, & Huang, 2007).
It should be pointed out that the model presented in Fig. 1 does
not
attempt to indicate all the potential uses of performance
appraisal and other HR practices such as employee
development. Rather it
aims to explain links between HR practices such as
compensation and performance appraisal and employee
misconduct.
From an individual level of analysis, misconduct re"ects a
rational choice theory of ethics and overlooks employee
individual
differences associated with moral integrity. The rational choice
perspective is largely a consequentialist perspective that re"ects
the self-serving advantages and disadvantages of some behavior
(Morrell, 2004). We acknowledge that individuals with higher
moral integrity are less likely to engage in misconduct despite
the organizational context (Ashkanasy, Windsor, & Trevino,
2006).
Nonetheless, many employees with less developed awareness of
their moral values are likely to be in"uenced by the ethical
context. Therefore, the proposed model is mostly applicable to
employees who are inclined to take a consequentialist
perspective
to misconduct and moral choices. Based on the frequency and
persistence of misconduct over time, lower levels of moral
integrity
appear to be relatively common in business.
It should also be pointed out that misconduct can occur from a
bottom up perspective or a top down perspective (Pinto, Leana,
& Pil, 2008). Furthermore, Pinto et al. suggest the processes
in"uencing misconduct are quite different between these two
models.

One of the biggest distinctions occurs with intentionality from
upper management. This paper focuses on a bottom up
perspective
where management unintentionally creates an organizational
context that allows an individual to make a rational choice to
pursue misconduct.
Fig. 1. A rational choice model of HR practices and misconduct.
319J. Werbel, D.B. Balkin / Human Resource Management
Review 20 (2010) 317–326
3.1. Compensation practices and misconduct
As per Fig. 1, we suggest that the con!guration of HR practices
(see Lepak & Snell, 2002) may increase or decrease the
perceived
costs and bene!ts of misconduct. The more prevalent certain
practices, the greater the potential rewards to be gained from
the
misconduct. We begin by focusing on compensation systems as
they may create situations that make misconduct to be rationally
more attractive.
Different types of compensation systems may unintentionally
increase the bene!ts of employee misconduct. Many
compensation plans are intended to reward a high performer
with increased levels of compensation. However, a basic
assumption is that misconduct may lead to increased
performance. Misconduct may be seen by some employees as a
short term
tactic to achieve higher levels of performance that trigger
desired rewards. If employees use misconduct to achieve higher
levels of

performance, then performance contingent compensation
systems may unwittingly reinforce misconduct. As Jansen and
Von
Glinow (1985) suggest, incentive pay may lead to instances of
employee misconduct. This seems to be compatible with others
who
have linked incentive pay to misconduct (Church, Gaa, Nainar,
& Shehata, 2005). Studies that report links between incentive
pay
and misconduct have not given speci!c details about the "awed
features of the incentive pay policies. Some companies use pay
incentives and have few problems with misconduct, while others
use pay incentives and report incidents of misconduct. These
mixed !ndings suggest that perhaps certain forms of
performance contingent compensation may be more likely to
in"uence
misconduct than others so that the overall use of pay incentive
systems should not be condemned.
One of the basic design features of performance contingent
compensation is the proportion of individual pay incentives to
base
pay. In most cases individual pay incentives are administered on
an ex ante basis so that the employees anticipate the reward in
advance. A bonus in the range of 10 to 15% of annual base
salary is large enough to provide a motive for misconduct
(Lazear, 2000;
McAdams & Hawke, 1994; Varadarajan & Futrell, 1984;
Krefting & Mahoney, 1977). A pay incentive of this magnitude
would
represent a six to ten thousand dollar payoff for an employee
with an annual salary of 60 thousand dollars. Assuming that the
compensation system emphasizes performance contingent
incentive pay, then the perceived bene!ts of misconduct (if it
leads to
performance gains) are likely to increase. Individual incentive

plans focus an employee's attention on individual behaviors that
trigger rewards. This can focus individual efforts on self-
serving behaviors that may produce wealth for the individual at
the
expense of the organization or other parties. Incentive pay plans
may also distract an employee's attention on how they achieve
their performance goals which may lead to unintentional
violations of a company code of ethics or norms of professional
conduct.
A well known example of the unintended consequences of
individual performance contingent pay occurred when Sears
Roebuck
lowered hourly wages of its auto mechanics and put them on a
commission pay plan that required that they generate a quota of
$147 per hour of auto repair work from customers.
Consequently, Sears auto mechanics over-billed customers for
unneeded parts
and services which ultimately led to a class action legal suit on
behalf of overcharged customers and damaged the reputation of
the
company (Applegate, 1992).
On theother hand, employers that only offer base pay with
modest levels of individual performance contingent pay are not
aslikely
to have employees engaged in misconduct. For example,
managers at Continental Airlines give out $50 “spot cash”
rewards when they
discover an employee doing good work such aspleasing a
customer and doing more than is expected on the job. A spot
cash reward is a
small amount of cash allocated to an employee on an ex post
basis and paid out immediately. Logically, with a modest sized
pay
incentive there are fewer bene!ts to be gained from misconduct
and only the potential downside risks of being caught. While

there are
likely to be signi!cant individual variations in the amount of
perceived gain that it takes to make misconduct attractive, the
greater the
size of the performance based reward relative to the base pay,
the greater the likelihood of misconduct.
Proposition 1. The greater the proportion of performance
contingent individual incentive compensation in relation to base
pay, the
greater the likelihood of misconduct.
Even within individual incentive plans, there are different
design features that could lead to a higher or lower likelihood of
employee misconduct. In particular, individual pay incentives
may be continuous or discontinuous. Continuous incentives
mean
that the level of performance and the amount of the incentive
are directly linked. Continuous incentives are on a continuous
reinforcement schedule. Sales commissions and piecework used
in manufacturing environments are the most well known
examples of continuous pay incentives. Discontinuous
individual pay incentives occur when incentives are linked to a
platform of
performance such as a quota. The incentive is given when the
platform of performance is attained. If the platform or quota is
not
attained (regardless of the distance from the platform) no
incentive is provided to an employee. Thus, the incentive pay is
earned
on an “all or nothing” basis.
While both types of incentives may make the perceived bene!ts
of misconduct more attractive, discontinuous incentives are
likely to increase the likelihood of employee misconduct more
than continuous incentives. The central point is that as one gets

closer to the platform of performance, there may be increasing
attraction to engage in misconduct in order to attain the desired
level of performance.
Furthermore, the size of a bonus can make a relatively minor
form of misconduct seem plausible. However, misconduct may
be
seen as a slippery slope. Once one has bene!ted from a
relatively minor or trivial form of misconduct, then one may
consider
performing a more serious form of misconduct in order to attain
a performance hurdle at a later period of time. It is analogous to
going from telling a small lie to the boss and getting away with
a minor infraction such as tardiness to fabricating a bigger lie to
give to the supervisor in order to get away with a gross
violation such as stealing company property.
Moreover, one common problem in the sales domain happens
when sales representatives are given a sales quota based on
sales
revenues that are measured over a period of time such as a
quarter during the business cycle. Meeting or exceeding the
sales quota
Review 20 (2010) 317–326
triggers a performance bonus. However, due to the variability of
the business cycle, client purchases are asymmetrical and
depend
on their economic prosperity as a precursor to buying a product
such as a capital good. Sales representatives are often tempted
to
buffer their booked sales revenues by withholding sales in

excess of a quota and reporting the sale in a future period in
order to
smooth out their potential for earning quarterly bonuses. These
poorly timed sales bookings can result in inaccurate aggregate
sales performance data reported to shareholders and the
investment community who may under- or over-value the stock
based
on false growth and revenue information.
In contrast, the incremental gain for misconduct should be less
for continuous incentives. This seems to be supported by
research that suggests that employees who fail to achieve their
discontinuous goals by a small margin are more likely to engage
in
misconduct (Schweitzer, Ordonez, & Douma, 2004).
Proposition 2. Discontinuous incentives are likely to increase
the likelihood of misconduct in comparison to continuous
incentives.
It is important to understand that reward systems in"uence
organizational dynamics as well as individual behavior since
rewards can strengthen (or weaken) organization culture. In this
situation, we view reward systems to be linked with symbolic
legitimation of misconduct. To convey this point, we need to
digress into legitimation.
Legitimation is concerned with the social construction of
desired or appropriate actions within an organization (Suchman,
1995). This perspective implies that what can be labeled as
misconduct (in this case inappropriate actions) is socially
constructed
to be desired.
A second point is that legitimation is frequently seen as a means
to justify actions (Dutton & Dukerich, 1991; Galang, Elsik, &

Russ, 1999). That is, people act or are about to act and wish to
couch their actions with the organization's support. Thus, a
common
justi!cation for misconduct is that a supervisor endorsed it. If a
supervisor approves an action, the checks and balances within a
system are likely to symbolically convey legitimacy to the
misconduct. Reward systems that are under control of
management
convey an explicit managerial support of misconduct if
misconduct leads to organizational rewards.
This suggests that individuals who commit an act of misconduct
may justify their actions for the “good of the organization.”
They are likely to rely on reward systems as a symbolic means
to rationalize the appropriateness of misconduct. The
opportunity to
justify one's actions for the “good of the organization” is likely
to increase the viability of misconduct. Incentive systems can
be
used to socially construct managerial support of misconduct.
Proposition 3. The greater the proportion of incentive pay to
base pay and the use of discontinuous incentives are likely to
convey
legitimacy of misconduct to increase the perceived acceptability
of misconduct.
3.2. Performance appraisal practices and misconduct
Performance management systems include HR practices tied to
performance appraisal and compensation. Performance
appraisal is a part of the performance management system
because it !rst speci!es performance standards and then assesses
employees against those performance standards. Many
administrative decisions are fully or partially determined by the
perfor-

mance evaluation. These decisions have a direct bearing on an
employee's job security, future employment opportunities,
status,
and pay within an organization.
Performance appraisal is most closely linked to deterrence of
misconduct. Fear of being caught and disciplined can be an
important deterrent of misconduct in organizations (Chiou,
Huang, & Lee, 2005; Manrique de Lara, 2006). Performance
appraisal
systems commonly entail supervisory monitoring of employee
performance. Thus, supervisors may play an important role in
in"uencing employees' perceptions of the cost of engaging in
misconduct. However, there is often information asymmetry in
performance appraisal as a supervisor has less information
about employee performance than employees themselves
(Aguinis,
2007). Thus, it is possible for employees to hide aspects of their
performance from their supervisors.
There are likely to be many reasons for the performance
information asymmetry. Supervisors may not be motivated to
search for
misconduct as supervisory monitoring of employee behavior
may be perceived negatively as micromanaging by subordinates
and
undermine the quality of supervisor–subordinate relationships.
To some extent close monitoring also con"icts with employee
empowerment efforts. Supervisors may also have dif!culties
monitoring performance as spans of control have increased in
many
organizations due to mergers, acquisitions, and the use of
electronic communication technologies that permit supervisors
and
subordinates to operate in different geographical locations.
Regardless of the reasons for information asymmetry, greater

information
asymmetry reduces employee perceptions of being caught and
disciplined for misconduct. From a rational choice perspective,
this
would be tied to perceived costs of misconduct. Thus, it is
important to discern how HR practices in"uence information
asymmetry.
As per Fig. 1, one of the ways to classify performance appraisal
practices is based on the criteria used to assess job performance.
Kowtha (1997) suggests that performance appraisal systems
may be classi!ed as either behavior based or outcome based
performance appraisal systems. Behavior based systems are
concerned with evaluating employees based on the way they do
their
jobs. It may include contextual job performance or it may
include general work processes. Thus, propensity to cooperate
with
others, product knowledge, or behaviors listed in a job
description would be examples of criteria used in behavior
based
performance appraisal. Behavior observation scales and
behaviorally anchored rating scales are representative of
methods used
within behavior based performance systems. The greater the
frequency or quality of desired behaviors, the higher the rating.
Behavior based performance measures require that the source of
the evaluative feedback have ample opportunity to observe
the ratee and judge him or her fairly. Thus, a supervisor is given
a motive to observe each subordinate's work behaviors in order
to
gather enough performance information to provide an evaluation
of job behaviors for each subordinate. When supervisors are

Review 20 (2010) 317–326
engaged in observing employee job behaviors and documenting
examples of positive and negative job behavior, the employee
perception of the cost of misconduct is likely to be high.
In contrast, outcome based performance appraisal systems are
concerned with evaluating the outputs of job performance
without taking employee job behaviors into consideration.
Performance outcomes can be evaluated in terms of quantity as
well as
quality of performance. Thus, the amount of sales in dollars
(quantitative) and level of customer satisfaction (qualitative)
are
examples of outcome based performance evaluation for a sales
representative. Goal setting performance appraisal processes
(Knight, Durham, & Locke, 2001) are types of outcome based
performance appraisals. Management-by-objectives (MBO) is a
popular example of outcome based performance appraisal that
relies on a set of mutually agreed upon goals that become the
criteria that an employee is judged on for purposes of
performance evaluation. Outcome based performance evaluation
systems
are attractive to organizations that lack the opportunity to
closely monitor the behaviors of employees when accurate
behavioral
performance data are not available. For example, store managers
in a large supermarket chain can be evaluated by district
managers on outcomes such as store revenues, employee safety
record, and store pro!t margin. District managers may use these
outcomes to evaluate store managers without traveling to each
store to observe how the managers perform their jobs.
Employees
may also !nd outcome based performance systems attractive

because they are given more discretion to achieve performance
goals
as they see !t.
It is our contention that outcome based performance appraisal
systems are more prone to incidents of misconduct than
behavior based performance appraisal systems due to the greater
discretion given to employees to achieve performance outcomes
that is linked with information asymmetry. With outcome based
performance appraisal, less emphasis is placed on the means
that
employees use to achieve outcomes, and supervisors devote less
time on monitoring employee behavior as a consequence. Thus,
outcome based performance appraisal systems are associated
with both perceived bene!ts of misconduct as goals become
increasingly more dif!cult to achieve over time, and a perceived
reduction in costs of misconduct, as employees are given more
discretion to select their own means to achieve outcomes.
In terms of perceived costs of misconduct, outcome based
performance appraisal offers inducements for employees to
engage
in misconduct for two reasons. First, outcome based
performance appraisals give employees the freedom to decide
how they wish
to achieve the outcomes. This can be positive in that it may
encourage employees to develop innovative strategies to meet
the
goals. However, in some cases these strategies may entail
misconduct if employees have dif!culties attaining the desired
outcomes
(Schweitzer, Ordonez, & Douma, 2004). If inappropriate means
are successfully used to achieve the performance outcomes, then
it
could be relatively easy to incrementally cross over and engage
in misconduct in order to achieve the outcomes. Thus, a

!nancial
broker may encourage customers with low tolerance for risk to
purchase highly volatile stocks as opposed to more appropriate
and
less volatile conservative stocks to increase total sales or
generate larger sales commissions. Volatile stocks may require
more
buying and selling activities timed to market movements that
generate more frequent commissions for a broker and which
reduce
a client's investment returns. The outcome based performance
criteria may encourage a !nancial broker to sell to clients a
product
they do not want in order to satisfy expected performance
standards. The borderline between this illustration and churning
accounts eventually becomes grey.
Managed health care companies have recently denied legitimate
medical claims from customers who had to take the
companies to court to receive a !nancial settlement for the
medical costs that they expected to be covered. In court
documents it
was discovered that these medical insurance !rms gave
substantial !nancial bonuses to claims adjusters in their
employment who
were given quotas for rejecting claims based on total number of
claims that were !led. The incentives were established to
encourage claims adjusters to look for reasons to deny claims
for medical coverage to a customer in order to generate higher
pro!ts. Initially this practice may have lead to some good
decisions in denying claims; however, over time this practice is
likely to
lead to choices involving misconduct for personal gain.
Second, outcome based performance appraisal may put pressure
on employees to take risks associated with misconduct by

making
it more rewarding to take those risks. With outcome based
performance appraisal, there is a tendency for supervisors to
expect
continuous improvements in subordinate performance each year
(Welch, 2001). If this tendency occurs, it is important to
consider
that the performance curve is asymptotic with relatively easy
gains being realized initially, but as performance improves, the
opportunity for gainsdecreases and requires a lot more effort.
Withthe risingexpectations, employees need to !nd ways to meet
those
increasing expectations. One of the ways to achieve those
expectations occurs with misconduct. For example, Columbia
HCA had
expectations to increase hospital revenues over previous years.
This practice appears to have motivated some general managers
to
engage in Medicaid and Medicare fraud as it became more
dif!cult to meet the rising performance outcome expectations.
Outcome based performance appraisal is also likely to minimize
the perceived costs of employee misconduct as its focus on
outcomes reduces the chances of being caught. Outcome based
performance appraisal is saturated with performance
information
asymmetry. It appears to be more commonly used when
supervisors have fewer opportunities to directly observe
behaviors
(Tremblay, Cote, & Balkin, 2003). Outcome based performance
appraisals have supervisors focusing on data associated with the
outcomes of performance rather than the way performance was
attained. While a supervisor could hypothetically gather
behavior
based performance, there could be high transaction costs
associated with monitoring each employee's behavior which

would be a
deterrent to gathering behavioral information. In other words, as
long as the outcomes are being met, the supervisor may be
unaware of the methods used by an employee to achieve those
outcomes. Thus, an employee knows what is done to achieve the
ends but the supervisor is not informed. Information asymmetry
provides fertile conditions for an agency problem, and tempts
an
employee to behave in opportunistic ways that can lead to
misconduct. When employee behavior is not monitored
employees are
likely to lower their expectations that they will be caught for
misconduct. Thus, employees with outcome based performance
evaluations are likely to perceive reduced costs of misconduct.
Review 20 (2010) 317–326
In contrast, behavior based performance evaluations should be
less prone to instances of employee misconduct. They are
intended to promote consistency in prescribed behavior.
Employees are likely to be motivated to engage in the socially
appropriate prescribed behaviors that are valued by the
organization. Furthermore, to assess performance, supervisors
are
expected to actually observe employees at work and keep
records of these work observations. This heightened supervisory
vigilance is likely to minimize information asymmetry.
Proposition 4. Organizations that use outcome based
performance evaluations are likely to have employees who
perceive higher
bene!ts of misconduct and lower perceived costs of misconduct,
compared to organizations that use behavior based performance

evaluations.
A second HR con!guration of performance appraisal that can
have misconduct implications is derived from the
interdependence that often occurs between supervisory and
subordinate performance outcomes. Since there are different
types of performance appraisal systems used for different
hierarchical levels within a !rm, this structural issue suggests
that it is
important to integrate supervisory and subordinate performance
standards to ensure a continuity of goals across levels in an
organization (Kaplan & Norton, 2001). This alignment may
entail an aggregation of subordinate performance outcomes as
an
indicator of supervisor performance outcomes. However, this
continuity in goals has the potential for supervisory con"ict of
interest, especially with outcome measurements. If a high
performing employee is engaging in misconduct to achieve that
high
level of performance outcomes, and if subordinate performance
directly and materially contributes to supervisory performance,
then the supervisor has a potential con"ict of interest in terms of
addressing the misconduct. If a supervisor investigates the
problem and corrects the misconduct, then that supervisor's
performance is likely to be reduced. To some extent, this
interdependence between supervisor and subordinate
performance may undermine supervisory motivation to
investigate
subordinates who engage in misconduct. Misconduct may lead
to higher levels of subordinate performance and ultimately
bene!t
the supervisor's performance rating. A supervisor's self-interest
for achieving high performance ratings is likely to diminish a
supervisor's motivation to punish misconduct and is likely to
reduce an employee's perceived risks of misconduct as the
supervisor

may provide tacit or in some cases direct support for
misconduct.
Proposition 5. When a supervisor and subordinate's performance
outcomes are closely linked, a subordinate's perception of
perceived
risk of engaging in misconduct is reduced.
A third aspect of the performance appraisal function addresses
the types of people involved in performance assessment. The
wide diffusion of the practice of three hundred sixty degree
performance appraisal has encouraged employers to consider
using
multiple raters of performance that can include peers, other
managers besides the supervisor, subordinates, and customers
(Aguinis, 2007). It acknowledges that there may be information
asymmetry between the supervisor and the subordinate since
supervisors have limited opportunities to observe subordinates
in many work environments and may not understand the
technical aspects of the job they are expected to supervise. In
order to manage this gap in a supervisor's knowledge of what a
subordinate does on the job, it is important to gather
performance assessment information from those who can most
closely
observe a subordinate's performance as well as understand the
job itself. For example, customers or peers are likely to have
direct
and sometimes regular contact with a target employee.
Gathering inputs from more than one source is likely to reduce
the job
performance information gap in comparison to relying on only
the supervisor to gather information about job performance.
While
three hundred sixty degree performance appraisal has its
limitations, by having more people observing and monitoring
behavior

that can reveal instances of misconduct, this practice is more
likely to increase an employee's fear of being caught. For
example,
trucking !rms often have 800 telephone numbers displayed on
the back of the truck so that other drivers can report some type
of
driving misconduct. This means that employees being monitored
by multiple raters should be aware that they are more likely to
be
exposed for committing misconduct. By including peers and
customers and other observers as sources of feedback in the
performance appraisal process an employee is likely to have a
heightened sense of fear of being caught in an act of misconduct
which raises the perceived costs of misconduct to them.
Proposition 6. The more performance appraisal assessments are
gathered from multiple and diverse sources, the greater will be
an
employee's perceived costs of engaging in misconduct.
4. Discussion
In summary, we link rational choice theory and the architecture
of HR performance management systems as factors that shape
organizational routines associated with misconduct. In
particular, we suggest that performance appraisals that (1) are
outcome
based, (2) have supervisors' performance closely linked to
subordinate performance, and (3) rely exclusively on a
supervisor as
the source of assessments of subordinate performance are more
likely to provide an impetus for employee misconduct.
Furthermore, compensation systems that emphasize incentive
pay in relation to base pay, provide pay incentives with all-or-
nothing payout schemes, and offer pay incentives with sizeable
payouts, are more likely to present conditions fertile for

employee
misconduct to occur.
This paper makes several important contributions to the
literature on employee misconduct and human resource
management.
First and perhaps most importantly, this paper moves beyond
generalized ideas that organizational culture or defective reward
systems shape employee misconduct and highlights some
speci!c HR practices that increase the likelihood for misconduct
to
occur. This suggests that pay incentives are not an inherently
dysfunctional motivational tool that some critics of pay
incentives
Review 20 (2010) 317–326
have argued (Jansen & Von Glinow, 1985). However, some
speci!c features of a performance management system that
incorporate
rewards as described previously in this paper are more likely to
contribute to misconduct than other features that could be
selected with forethought. For example, the use of group pay
incentives rather than individual pay incentives is likely to
diminish
the prevalence of misconduct. Group pay incentives facilitate
social cohesion and more pervasive mutual monitoring of
behavior
within a group which increases the risk of getting caught
associated with employee misconduct.
This paper links HR practices, organizational legitimacy, and
employee misconduct as part of an emerging trend to provide

systematic explanations for employee misconduct. Some initial
work has linked HR practices and organizational routines
(Galang,
Elsik, & Russ, 1999) and others have linked legitimacy and
ethics (Jose & Thibodeaux, 1999). This paper then links HR
practices,
organizational legitimacy and employee misconduct together
using a rational choice theory approach. The important
implication
here is that when employee misconduct becomes
institutionalized, there is a sense of legitimacy to the action.
Employees are likely
to rationalize their misconduct as the organization unwittingly
supports the misconduct through inappropriate application of
HR
practices by both HR staff and line managers.
From a theoretical perspective, this paper links HR practices
with misconduct within a rational choice perspective. It assumes
that employees make choices to engage in behavior based on
costs and bene!ts of the outcomes consistent with a
consequentialist
or utilitarian approach to ethics. Most of the research on
employee misconduct focuses on individual differences or
employee
perceptions of situations. There is evidence that employee
misconduct is in"uenced by situational factors as well as
individual
differences (Kidder, 2005). Furthermore, a meta-analysis
suggests that general perceptions of ethical climate are
important
predictors of ethical behavior (Martin & Cullen, 2006). HR
practices have been linked to ethical climate (James, 2000).
Unlike
previous research, this paper highlights the importance of
speci!c situational factors associated with HR practices.

Selecting a
situational approach to misconduct, this paper takes a cross
level of analysis that recognizes that different organizational
factors
affect individual propensity to engage in misconduct and this
has important implications for research.
5. Recommendations
From a practical perspective, this paper suggests performance
driven HR practices may have some unintended negative
consequences on an organization as employees !nd ways to take
performance shortcuts that in the long term can undermine
organizational effectiveness through employee misconduct. We
would like to suggest that the HR practices discussed in this
paper
are not inherently positive or negative and the HR practices may
have links to both intended performance outcomes and
unintended employee misconduct. The question becomes how
can one have both performance driven systems and reduce the
chances of employee misconduct?
We offer several suggestions to reduce the likelihood of
misconduct. First, HR practices need to minimize the gap in
performance information available between what an employee
and his or her supervisor knows. Organizations need to combine
several of the following suggestions to minimize this
information gap.
First, assigning multiple evaluators for the performance
appraisal process is one of the critical ways to assess
performance and
reduce performance information asymmetry between a
supervisor and subordinate. However, the burden of identifying
and
correcting misconduct falls on the supervisor. It is evident that

supervisors often have a propensity to focus on the performance
management of poor performers, a practice referred to as
“management by exception.” However, for misconduct, it is also
important to focus supervisory attention on high performers as
well. For example, the NCAA monitors winners and not losers
in
intercollegiate athletics.
Next, supervisors may need to scrutinize high performers as
well as low performers for information on how they perform
their
jobs, just as a teacher might check up on a student with a
perfect score on an exam to !nd evidence of cheating. For
example, many
universities require that all the faculty undergo periodic peer
teaching evaluations where a peer sits in and observes the
teaching
done by a faculty member. These peer class visits are done to
provide additional evidence of effective teaching performance
beyond the data gathered from student course evaluations since
student evaluations may be gamed by faculty such as by being
overly lenient in allocating grades to students. An important
aspect of supervisory monitoring and evaluation is to include
behavioral indicators of performance in addition to outcome
indicators for both the supervisor and the subordinate. If only
outcomes are used as a basis for evaluating subordinate
performance, then supplemental behavioral indicators of
performance
should also be required and linked to performance outcomes.
Additionally, the use of pay incentives should be based on
having reliable measures of performance outcomes and
behaviors. The
balanced scorecard (Kaplan & Norton, 2001) provides examples
of !rms that attempt to integrate both outcome and behavioral
indicators of performance. In the balanced scorecard, behaviors

are !rst assessed. Next, hard performance outcomes such as
!nancial success are collected at a later time. Pay incentives are
provided based on a composite assessment of the behavioral and
performance outcomes.
Finally, we suggest that a mix of pay incentives across
organization performance levels may be more appropriate than
the
exclusive use of individual incentives. Individual pay
incentives, a departmental or team based pay incentive, and an
organi-
zational based pay incentive are likely to diminish the overall
attractiveness of employee misconduct while still providing
incentives for performance gains. The group pay incentives
intensify the process of peer monitoring behaviors and make
employee
misconduct more noticeable and costly to enact. A supervisor
can provide feedback and rewards on individual job behaviors
and
outcomes, and then can provide pay incentives based on
collective outcomes. Therefore, we do not propose doing away
with
individual pay incentives. Rather we are proposing a more
balanced reward system that balances individual pay incentives
with
group pay incentives in order to reduce the temptation to engage
in opportunistic behavior that may be unintentionally rewarded.
Review 20 (2010) 317–326
It should be mentioned that our model and propositions only
cover one contextual aspect of organizational misconduct
related

to HR practices. We acknowledge that leadership in an
organization is also a signi!cant contextual in"uence on
employee
misconduct independent of the HR context. Paralleling this
logic is the notion that leadership plays a critical role in the
institutionalization of any practice (Dutton & Dukerich, 1991).
We assume the same would be valid for employee misconduct.
We
focused on HR practices and excluded leadership to provide
greater clarity on an under-examined contextual factor.
This raises some important issues that need greater clari!cation
and should be subject to empirical investigation. We suggest
there is a need to examine the relationship between HR
practices and leadership. HR practices are likely to in"uence the
perceived
costs and bene!ts of employee misconduct for all employees
regardless of managerial status. To what extent do HR practices
in"uence leader behaviors towards employee misconduct? Are
leaders more or less prone to misconduct than employees? For
example, leaders have more discretion over their performance
than other employees and face greater temptations to abuse their
power in order to satisfy their own personal interests at the
expense of the collective interests of others. It would be useful
to know
which HR practices encourage leaders to behave in the service
of others and which ones encourage leaders to act in self-
serving
and inappropriate ways.
In future research that examines the link between HR policies
and employee misconduct models that are more complex
than the rational choice model that we present could be
developed that take into consideration other variables that affect
employee misconduct such as emotion. For example, negative
emotions could explain other reasons for employee misconduct

to occur as a form of retribution when an organization
underpays an employee for contributions that it received
(Greenberg,
1990).
To sum up, HR practices can unintentionally provide a context
for employee misconduct to take root. Prior to implementing an
HR practice such as a new performance management procedure,
managers should study the behavioral consequences of the HR
practice in question, which goes beyond applying the
administrative ef!ciency and legal criteria that are so often
used. Managers
should ask themselves whether the HR practice could encourage
some employees to engage in misconduct and be able to provide
a negative response to the question. If possible, managers
should roll out a new HR practice on a small scale on a subunit
of their
organization before fully committing to the new HR practice
within the organization. In this way HR practices can be !ne
tuned so
that there is a reduced likelihood for employee misconduct
linked to HR.
Acknowledgments
The research work of David Balkin has been funded by an
AGAUR grant # (2008PIV 0083) with the support of the
Commission
for Universities and Research of the Ministry of Innovation,
Universities and Enterprise of the Government of Catalonia
while he
was a visiting scholar at the Institute of Labor Studies at
IEL/ESADE in Barcelona, Spain.
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Complete an article synopsis/summary and critique on a
strategic human resource management topic.
After choosing one of the sample formats, prepare a synopsis.
The final section of the paper is a critique of the information
from the article.
A critique should include the following topics:
What was done poorly (e.g., relevant information omitted)?
What was done well in the article (e.g., new insights
identified)?
What specific questions need to be answered to help make the
article information relevant for practicing managers in
business?
CAUTION: This synopsis must be a paraphrased report. You
may NOT use quotations of more than 5 consecutive words from
the article in preparing the report. The only exception is
reporting the study hypotheses (i.e. H1, etc.) if it is a reviewing
of an empirical article. When quoting 5 or fewer words or the
hypotheses (if an empirical article), you would put quotation
marks around the material quoted and put the page number in

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