Person–Organization Fit and Incentives: A Causal Test

Abstract

We investigate the effects of organizational culture and personal values on performance under individual and team contest incentives. We develop a model of regard for others and in-group favoritism that predicts interaction effects between organizational values and personal values in contest games. These predictions are tested in a computerized lab experiment with exogenous control of both organizational values and incentives. In line with our theoretical model, we find that prosocial (proself)-orientated subjects exert more (less) effort in team contests in the primed prosocial organizational values condition, relative to the neutrally primed baseline condition. Further, when the prosocial organizational values are combined with individual contest incentives, prosocial subjects no longer outperform their proself counterparts. These findings provide, to our knowledge, a first, affirmative, causal test of person–organization fit theory. They also suggest the importance of a “triple-fit” between personal preferences, organizational values, and incentive mechanisms for prosocially orientated individuals. This paper was accepted by John List, behavioral economics.

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