ACCEPTANCE OF ELECTRONIC MONITORING AND ITS CONSEQUENCES IN DIFFERENT CULTURAL CONTEXTS: A CONCEPTUAL MODEL Presented in the 5 th Annual International Business Research Forum Information Technology and International Business Theory and Strategy Development Philadelphia, PA March, 26-27, 2004 DARIA PANINA Texas A&M University JOHN R. AIELLO Rutgers University

Introduction & Research Question Recent trend: to outsource marginal organizational functions to developing countries How to ensure that company-wide quality standards are met by foreign subsidiaries and subcontractors?

EPM – a Possible Solution Electronic Performance Monitoring (EPM) is “the practice of using computers and/or telecommunication technology to collect, analyze, and report information about employee performance” (U.S. Congress, OTA, 1987) Distance Cost Timely feedback Objective data AdvantagesDisadvantages Employee stress Employee dissatisfaction Emphasis on quantifiable performance measures

Objectives of the Paper Review the evidence on the acceptance and effects of EPM in the USA & other countries Develop a model of the relationship between national culture, EPM, its acceptance and consequences Develop a set of propositions regarding culturally acceptable EPM systems to guide further research & practice Offer recommendations for EPM implementation & design in different cultures

EPM and its Features (Aiello &Kolb, 1995) Target Pervasiveness Recipient Purpose Concomitant practices

Culture & Its Dimensions (Hofstede & Bond, 1988) Individualism-Collectivism (IND) Power Distance (PD) Uncertainty Avoidance (UA) Masculinity-Femininity (MAS) Confucian Dynamism (CD)

EPM in the USA: is considered acceptable and leads to positive outcomes when: it provides objective performance data it is accompanied by other monitoring techniques to capture all sides of work it is provided on an individual basis it is implemented in an employee-friendly work context tasks are relatively simple

Culture, EPM, and its Consequences: Conceptual Model EPM Fairness Perceptions & Control Individualism/Collectivism Uncertainty Avoidance Power Distance Masculinity/Femininity Confucian Dynamism EPM Acceptance Culture Performance Stress Job satisfaction Commitment OCB Outcomes Target Pervasiveness Recipient Purpose Concomitant practices EPM

IND – Possible Effects on EPM Acceptability IndividualismCollectivism Target Pervasiveness Recipient Purpose Conc. Practices Individual/work products Group/work behaviors Employee/Supervisor*Work Team/Supervisor* Group performance feedback /informal performance reviews Objective performance measurement/feedback Individual incentives, employee-centered processes Teamwork, group incentives & praise Pervasive * Depends on the PD

Individualism/Collectivism & EPM: Propositions Individualist cultures are more likely to accept EPM that collects objective and comprehensive data on individual performance for evaluation and development purposes. Collectivist cultures are more likely to accept EPM that collects comprehensive data on group behaviors for the purposes of improving group performance and as a basis for informal performance reviews.

High UALow UA Target Pervasiveness Recipient Purpose Conc. Practices Detailed explanation of EPM & data use; visibility of monitoring Monitoring/objective performance measurement General guidance/ feedback Employee Pervasive IndividualIndividual/Group* Employee/Group/Supervisor* Pervasive/Non- Pervasive Goal-setting, pay for performance UA – Possible Effects on EPM Acceptability * Depends on the M/F

Uncertainty Avoidance & EPM: Propositions High UA cultures are more likely to accept individual level EPM by providing immediate electronic feedback & more objective performance data. To be effective, EPM should be explained to employees in detail. Low UA cultures are less concerned about the ambiguity associated with EPM use and are more likely to accept EPM that provides opportunities for professional growth and that provides general guidance and feedback.

PD – Possible Effects on EPM Acceptability High PDLow PD Target Pervasiveness Recipient Purpose Conc. Practices SupervisorEmployee/Group* FeedbackMonitoring, performance appraisal, feedback Bureaucratic controls, top- down decision making Participatory management, worker control, goal setting PervasiveNon-pervasive Individual/Group* * Depends on the I/C

Power Distance & EPM: Propositions High PD cultures are more likely to accept EPM if imposed by superiors, especially if accompanied by an autocratic style of management and top-down decision making. Low PD cultures are more likely to accept EPM if it allows for employee control, participation & ownership.

MAS - Possible Effects on EPM Acceptability MasculinityFemininity Target Pervasiveness Recipient Purpose Conc. Practices Individual Group Employee/SupervisorGroup Group performance feedback Objective individual performance measurement Pay-for-performance Human-centered production ResultsProcesses

Masculinity/ Femininity & EPM: Propositions Masculine cultures are more likely to accept EPM if it provides objective performance data and leads to higher productivity and competitiveness. Feminine cultures are more likely to accept EPM if it is used to improve the quality of work life and workers’ competence and de-emphasizes individual competition.

CD - Possible Effects on EPM Acceptability High CDLow CD Target Pervasiveness Recipient Purpose Conc. Practices Individual/Group* Individual/Group/Supervisor* Informal performance reviews Feedback for increased competence & performance Long-term goals; extensive data collection Short-term goals; focus on results Pervasive/BehaviorsPervasive/Results * Depends on the PD & IND

High/Low Confucian Dynamism & EPM: Propositions High CD cultures are more likely to accept EPM if it provides comprehensive performance data and assists employees in improving their competence and performance. Low CD cultures are more likely to accept EPM if it provides performance data that emphasizes short-term results and is accompanied by procedures allowing for saving face.

Culture & Perceptions of Fairness Distributive justice judgments are affected by the choice of the reward distribution rule in a particular culture. EPM should be aligned with reward allocation & relevant as a performance measurement tool. Procedural justice includes the concept of “voice”. Relationship between EPM and perceptions of its fairness might be moderated by PD. Informational justice perceptions and information seeking behaviors might be influenced by PD and UA. Interactional justice judgments might be influenced by IND.

Conclusions Cultural value orientations are stable – to ensure acceptance of new technology, it is advisable to make its implementation and use contingent upon cultural norms EPM is not a monolythic practice, there is a great deal of variance in its use, thus, cultural adaptations are relatively easy to accomplish EPM & culture may interact in multiple ways, case-by- case consideration is needed to design a culturally- acceptable EPM system