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This case represents an amalgam of commonly reported experiences people have when interacting with others from different social class backgrounds and positions of power. The A case takes the perspective of Dan Marlow, who grew up with access to financial and cultural resources and has built his own construction company. He has just fired Robby Gomez, an otherwise great worker, for chronic lateness, and he wonders why he is having trouble motivating and keeping employees. The B case takes the viewpoint of Gomez, who works hard but has trouble getting to work on time because of practical difficulties like car trouble and obligations to family and others in his community. By comparing the perspectives and experiences of these two protagonists, students learn to see how our own experiences and cultural knowledge can inform our decisions and the employee programs that we design. Because we are not aware of cultural norms that we have not personally experienced, we need to include a diversity of viewpoints in the decision-making and design processes in order to design effective systems and have effective interactions across differences. Excerpt UVA-OB-1282 Rev. Aug. 5, 2020 Marlow Construction (A): Dan Marlow, Founder and President Dan Marlow was the founder and president of Marlow Construction, a midsized construction company in New England. He had started his company right out of college, while working part-time for his father's law office. He had borrowed some money from his family and had taken a small bank loan to buy a truck and some equipment, and soon began doing small projects. His first clients were friends and family who lived in nice neighborhoods, other lawyers his father knew, and some of his more well-to-do family friends. As his business grew, Marlow hired more people and took on bigger projects. Now, his company employed about 35 full-time workers. However, recurring personnel issues were driving him crazy, and at the moment, he was feeling bad about a recent conversation. Earlier that day, Marlow had fired Robby Gomez, an employee who had worked for Marlow Construction for several months. Marlow liked Gomez. From what he could tell, Gomez was a very capable worker and spent a lot of time helping other people on his work crew. Marlow thought Gomez had a lot of potential, if he buckled down and committed himself to his work. He could probably even learn to run his own crew of workers. Instead, Gomez had a history of showing up late, if at all, and demonstrated very little desire to go above and beyond for clients. Marlow thought about his relationship with Gomez over the past couple of months. He had made several attempts to connect, explaining that it was important to the company, to Gomez's future employment, and to the clients of Marlow Construction that workers showed up on time and did excellent work. But it seemed that no matter how many times Marlow brought it up, Gomez continued to have problems showing up and often seemed distracted. Marlow had tried to motivate Gomez once by recognizing some good work he had done: he'd even given him a gift card to a nice restaurant in town as a way of saying thanks. The issues with Gomez bothered Marlow because the situation wasn't unique. A number of employees had problems with timeliness, effort, and turnover. Sometimes an employee would just disappear one day and never come back! . . .

A gift card promotion provides customers an incentive to spend more than an expenditure level on regularly priced (as opposed to discounted) products, by rewarding customers with a gift card to be redeemed against a future purchase. This type of promotion is widely used by luxury fashion, department, and consumer electronic stores. In this paper, we empirically test and quantify the causal effects of gift card promotion on the retailers' revenue and the mechanisms through which it impacts customers' purchase behavior. To do so, we collaborate with a major U.S.-based fashion retailer that regularly runs gift card promotions on its online channel by targeting its customers through promotion emails. We utilize our partner retailer's targeting policy to run a regression discontinuity design analysis. We find that gift card promotion increases retailer's revenue by up to 113%. The magnitude of this effect, however, reduces with the customers' recency of purchase from the retailer's website and becomes insignificant for customers who made their last online purchase more than 13 months ago. We also find that frequent purchasers, who are likely to have lower cost of redeeming a gift card, are more likely to participate in the promotion. Using our estimations, we attribute $554K to $1.14M (i.e., 18.50% to 38.14%) of the retailer's $2.99M total online channel revenue during promotion days to gift card promotion, on average. We find that the gift card promotion email increases sales even among customers who do not participate in the promotion. Specifically, advertising the gift card promotion through an email increases customers' preference for the retailer but has no significant informative or reminder effects. We attribute 70 to 89% of the promotion's total impact to this advertisement effect. We also run a propensity score matching analysis and find that customers who redeem their earned gift cards increase their expenditures (beyond the face value of the gift card) by 23.3%, on average. Therefore, we show that redemption of gift cards induces additional expenditure and, hence, can be profitable for the retailer offsetting any promotional costs incurred.

Prior research examines practitioner, investor, and executive perceptions of corporate tax planning. However, little is known about how the typical U.S. consumer views corporate tax planning. We examine consumers’ perceptions of corporate tax planning using both survey and experimental methods. First, we survey U.S. consumers and find that while most express negative preferences for tax planning, they rank it at the bottom of purchase decision factors. Few consumers recall ever seeing a negative media article about taxes. Thus, while consumers state a preference against corporate tax planning, that preference is not particularly strong. However, for the minority of consumers who have read negative articles about a firm’s tax planning, a significant portion claim to have changed their purchasing behavior accordingly. Second, we use an experiment to investigate the consumer effects of tax planning, randomly treating consumers with exposure to news about tax planning and imposing real economic consequences on the participants. We find that consumers exposed to negative tax information about a firm are significantly less likely to prefer receiving a gift card from that firm, suggesting that there is an effect of tax planning on consumer preferences even in the presence of a real economic consequence.

Our study examines the effectiveness of a novel approach intended to motivate employee behavior desired by the company, i.e., the use of a virtual slot machine that employees can play to possibly win gift card rewards of up to $500. We use proprietary data from a company that implemented an online learning platform where employees could voluntarily self-administer training on a daily basis. Employees who complete the daily training modules and answer quiz questions correctly earn points that they can then use to bid on gift cards through an online auction site linked to the learning platform. The company subsequently activated an option of allowing employees to also use their accumulated points to play a virtual slot machine to possibly win the same gift cards available through the online auction site. Based on psychology theory related to gambling behavior, we predict that for employees who choose to use the slot machine, the enjoyment derived simply from playing will motivate increased completion of daily training modules and improved quiz performance to acquire the currency (points) required to play. Using a difference-in-difference approach based on matched samples of employees who never played the slot machine (‘control’ group) or played it at least once (‘treatment’ group), we find support for both of our predictions. Our results suggest that the use of games-of-chance such as a slot machine that are enjoyable to play can be a cost-effective means of motivating desired behavior.

We examine management control systems in the context of wellness programs — organizational initiatives designed to improve the physical and mental health of employees. In a field study setting, we examine the associations of three different types of incentives (cash, gift cards, and tangible rewards) with reward selection and wellness program performance. We find that employees choose to be rewarded most often with cash, followed by gift cards and tangible rewards, respectively. We find that program participants’ performance is greatest when their chosen reward is a gift card, despite cash rewards being selected more than twice as often. Tangible rewards are the least frequently selected and are associated with lower performance than gift cards but relatively similar performance as cash. These results support theories of individual choice and motivation, and suggest that employees’ incentive choices are not necessarily those with the strongest motivational power.

Monetary gifts in the form of a gift card can lead one to spend and conceive of these funds differently than if the gift is given as cash. Across four experiments, the presentation of a gift card rather than cash led to both intended and actual spending beyond the amount of the original gift, and also influenced the types of purchases that consumers made. Even when features of the gift card payment mechanism that restrict fungibility of funds were removed, receiving a gift card led to greater spending than when an equivalent cash gift was received.