Preference for rule-based vs discretionary allocation systems: a threat perspective

Derfler-Rozin, R (2012) Preference for rule-based vs discretionary allocation systems: a threat perspective. Doctoral thesis, University of London: London Business School.

Abstract

People can be very sensitive to the way their outcomes are determined. Allocation systems can be based on clear, predetermined rules and procedures (rule-based systems) or they can also allow for a high degree of discretion of an authority figure, based on an interaction with/observation of that person for whom the outcomes are allocated (discretion-based systems). I argue that the comparison to others in a discretionary allocation system elicits the fear that others (especially others who satisfy the same 'eligibility rule') will gain better outcomes than the self following the discretionary decision, and that this fear stems from a threat to basic fundamental motives such as self protection, status maintenance, and affiliation needs. This threat makes people often prefer rule-based allocation systems over discretionary ones. In the first part of my empirical examination I show in a series of studies using different methodologies (a field study, scenario studies and laboratory experiments) that the more people compare themselves with others, the less they are likely to prefer/choose discretionary allocation systems. I also examine the threat to the self protection motive but do not find support for this threat. In the second part of my empirical examination I examine the threat to the other two fundamental psychological motives (status maintenance and affiliation needs) that may be associated with a discretionary allocation system. My results show that status maintenance concerns and concerns for affiliation play a pivotal role in determining people's preference for rule-vs. discretionbased allocation systems. This work has important implications for literature on job design by conceptualizing and examining discretion in allocation decisions from the perspective of those at the receiving end of the outcomes.