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Contract frame and participation: mitigating disadvantages of penalty contracts

conference contribution
posted on 2017-01-01, 00:00 authored by D D Fehrenbacher, Vincent Bicudo de CastroVincent Bicudo de Castro
Contracting is an important aspect of IT governance and control. This aspect involves the manner in
which goals are set, their achievements rewarded and penalized. In the context of service level
agreements it has been shown that contracts that involve penalties have positive effects on
individuals’ effort and negative effects on individuals’ attitude such as fairness perception. The
negative effects of penalty clauses are a likely reason why they are rarely found in contracting with
individuals. Our study was motivated by the question whether negative effects of penalty contracts can
be mitigated. In an experiment we found that controllee participation can mitigate such negative
effects. This implies that controllee participation is even more important in the face of penalty
contracts in order to maintain high fairness perception levels.

History

Event

European Conference on Information Systems (25th : 2017 : Guimaraes, Portugal)

Pagination

293 - 309

Publisher

Association for Information Systems

Location

Guimarães, Portugal

Place of publication

Atlanta, Ga.

Start date

2017-06-05

End date

2017-06-10

ISBN-13

9780991556700

Language

eng

Publication classification

E1 Full written paper - refereed; E Conference publication

Copyright notice

[2017, Association for Information Systems]

Title of proceedings

ECIS 2017 : Proceedings of the 25th European Conference on Information Systems

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