Managers’ Beliefs about False Performance Reports: How High Goals and Low Performance Levels Can Be Unethical Warning Signals

This study examines managers’ beliefs about how goals and performance levels can motivate overstatement of accomplishments and compares if managers’ moral assumptions are consistent with research showing that goals can motivate low and as well as high performers to unethically overstate achievements. Seven hundred thirty-eight top- and mid-level managers were in four different studies asked to judge case vignettes where employees, teams, and firms considered what performance level to report. There were four main conditions: with/without performance goals and low/high performance levels, and managers rated the likelihood of overstating the reports beyond actual achievements. A majority believed that goals make overstatements more likely and that low performance increases this tendency. The study suggests that managers are morally aware that goals can promote unethical reporting but can ignore that high performers might cheat. Implications for management training, reporting systems, performance appraisals, and organizational roles are discussed.