regardless of whether the subordinate missed or beat the target, superiors with ex post discretion chose to adjust their bonus 69% of the time (47 out of 68), but those without subordinate’s discretion would have adjusted the bonus if they had the opportunity only 51% of the time (38 out of 74). A Chi-squared test shows that this difference in likelihood is significant and that superiors with ex post discretion during the target-setting process are more likely to adjust a bonus due to an uncontrollable event than superiors without discretion would if subordinate’s given the opportunity, supporting H3a (Pearson Chi-square = 4.66, p = 0.02, one-tailed). [Insert Table 2 and Figure 2 here] We further analyze whether this greater propensity for superiors with discretion to make ex post adjustments holds in both the and conditions. In the condition, Missed Beat Missed superiors with ex post discretion chose to adjust their bonus 100% of the time (37 subordinate’s out of 37), but those without discretion would have adjusted the bonus 92% of the time (35 out of 38), and a Chi-square test shows this difference is significant (Pearson Chi-Square = 3.04, p = 0.04, one-tailed). For the condition, superiors with ex post discretion chose to adjust their Beat bonus 32% of the time (10 out of 31), but those without discretion would have subordinate’s adjusted the bonus only 8% of the time (3 out of 36), and a Chi-square test shows this difference is significant (Pearson Chi-Square = 6.10, p = 0.01, one-tailed). These tests provide further support for H3a: superiors with ex post discretion are more likely to adjust the bonus of a subordinate for an uncontrollable event, both when this event caused the subordinate to miss or beat the target. We predict in H3b that the difference in the propensity to make ex post adjustments in the and conditions will be less pronounced when subordinates missed Discretion No Discretion rather than beat the target due to an uncontrollable event. Thus, we test the interaction of
regardless of whether the subordinate missed or beat the target, superiors with ex post discretion chose to adjust their subordinate’s bonus 69% of the time (47 out of 68), but those without discretion would have adjusted the bonus if they had the opportunity only 51% of the time (38 out of 74). A Chi-squared test shows that this difference in likelihood is significant and that superiors with ex post discretion during the target-setting process are more likely to adjust a subordinate’s bonus due to an uncontrollable event than superiors without discretion would if given the opportunity, supporting H3a (Pearson Chi-square = 4.66, p = 0.02, one-tailed). [Insert Table 2 and Figure 2 here] We further analyze whether this greater propensity for superiors with discretion to make ex post adjustments holds in both the Missed and Beat conditions. In the Missed condition, superiors with ex post discretion chose to adjust their subordinate’s bonus 100% of the time (37 out of 37), but those without discretion would have adjusted the bonus 92% of the time (35 out of 38), and a Chi-square test shows this difference is significant (Pearson Chi-Square = 3.04, p = 0.04, one-tailed). For the Beat condition, superiors with ex post discretion chose to adjust their subordinate’s bonus 32% of the time (10 out of 31), but those without discretion would have adjusted the bonus only 8% of the time (3 out of 36), and a Chi-square test shows this difference is significant (Pearson Chi-Square = 6.10, p = 0.01, one-tailed). These tests provide further support for H3a: superiors with ex post discretion are more likely to adjust the bonus of a subordinate for an uncontrollable event, both when this event caused the subordinate to miss or beat the target. We predict in H3b that the difference in the propensity to make ex post adjustments in the Discretion and No Discretion conditions will be less pronounced when subordinates missed rather than beat the target due to an uncontrollable event. Thus, we test the interaction of