SKEMA Business School, U. Côte d’Azur (GREDEG), France
Many firms simultaneously pursue short-term profitability and long-term objectives such as sustainability. Yet, their employees keep focusing on business-as-usual, neglecting the second objective for a lack of clear appraisal and rewards. This phenomenon - called adverse specialization - has employees concentrate on a strict subset of tasks while the firm would have them address the full set. One solution advanced in agency theory is to implement proper contingent monitoring and clawbacks in order to align the agent's behavior with the principal's objectives. Using an experimental methodology, this study tests and finds evidence for implementing this scheme. Additional findings highlight an effort-performance expectancy when employees face different levels of risk in a multitask problem, all else being equal.