Employee Reactions to Company Policy Change: The Effect of Policy Direction and Managerial Justification

Last registered on August 20, 2026
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Pre-Trial

Trial Information

General Information

Title
Employee Reactions to Company Policy Change: The Effect of Policy Direction and Managerial Justification
RCT ID
AEARCTR-0019083
Initial registration date
July 24, 2026

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
July 27, 2026, 7:03 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
August 20, 2026, 5:45 PM EDT

Last updated is the most recent time when changes to the trial's registration were published.

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Primary Investigator

Name
Xiaomei (Grazia) Xiong
Affiliation
Utah State University
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Other Primary Investigator(s)

PI Name
Theresa Libby
PI Affiliation
University of Central Florida
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PI Name
Lan Guo
PI Affiliation
Wilfrid Laurier University
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Additional Trial Information

Status
On going
Start date
2026-07-21
End date
2028-07-31
Keywords
Behavior, Firms & Productivity
Additional Keywords
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
This study examines how employees respond to organizational policy changes and the justifications managers provide for those changes.
A managerial pre-study was conducted to obtain managers’ policy decisions and accompanying justifications. Following completion of the managerial pre-study, we have revised the implementation plan for the employee experiments.

The revised employee experiment uses a 2 (Policy Change: Abandon vs. Double Down) × 2 (Justification: Business vs. Moral) between-subjects design in the context of an organizational sustainability policy. The study examines how the direction of a policy change and the manager’s justification jointly influence employee responses, including honesty and turnover intentions.

The revised employee experiment is limited to the Sustainability context only following evidence from the managerial pre-study that decisions differed substantially across policy domains, suggesting that the DEI context may introduce additional domain-specific considerations beyond the theoretical mechanism of interest. To provide a cleaner confirmatory test of our hypotheses, we will first conduct the employee experiment using the Sustainability context only.

This amendment was made before any employee-experiment data were collected or observed.
External Link(s)

Registration Citation

Citation
Guo, Lan , Theresa Libby and Xiaomei (Grazia) Xiong. 2026. "Employee Reactions to Company Policy Change: The Effect of Policy Direction and Managerial Justification." AEA RCT Registry. August 20. https://doi.org/10.1257/rct.19083-2.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
The project consists of two online studies conducted through Prolific. In Study 1 (already collected), participants with managerial experience make decisions about organizational initiatives and provide a justification for those decisions. In Study 2, working adults receive information based on decisions made by Study 1 participants and complete an incentivized reporting task. Participants’ decisions have real financial consequences for themselves and, where applicable, a matched participant.
Intervention Start Date
2026-08-31
Intervention End Date
2028-07-31

Primary Outcomes

Primary Outcomes (end points)
The primary outcome is reporting honesty, measured as the difference between hours reported and hours actually worked. Higher values indicate greater over-reporting. We examine the effects of policy change, justification framing, and initiative type on this outcome.
Primary Outcomes (explanation)
Reporting dishonesty will be operationalized as the number of hours reported in excess of the participant’s actual hours worked: Misreporting=Reported Hours−Actual Hours.

Secondary Outcomes

Secondary Outcomes (end points)
The secondary outcome is turnover intention, measured using participants’ responses to items assessing their intention to leave the organization. Higher values indicate stronger turnover intentions.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The revised employee experiment uses a 2 (Policy Change: Abandon vs. Double Down) × 2 (Justification: Business vs. Moral) between-subjects design. Participants will be individually and randomly assigned to one of the four conditions. All conditions concern an organizational sustainability policy.

The originally registered policy-domain factor—Sustainability versus DEI—has been removed from the revised employee experiment. This change was made following completion of the managerial pre-study and before the collection or observation of any employee-experiment data. The managerial pre-study indicated substantial differences in managers’ decisions across the two domains, raising the possibility that the DEI context introduces domain-specific considerations beyond the theoretical mechanism of interest.




Experimental Design Details
Not available
Randomization Method
In the revised Study 2, all participants first complete a charity allocation task, and then will be randomly assigned to one of the four sustainability conditions, regardless of their allocation decisions. Their first stage allocation decisions may be used as an analysis filter and/or included as potential moderators or covariates.
Randomization Unit
The unit of randomization in revised Study 2 is the individual participant. Participants are randomly assigned to one of four experimental conditions within the sustainability domain.
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
Maximum of 250 participants for revised Study 2.
Sample size: planned number of observations
Maximum of 250 participants for revised Study 2
Sample size (or number of clusters) by treatment arms
50 - 60 participants per condition
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
In the absence of pilot data, we assume a medium effect size of Cohen’s f = 0.25. With 210 participants in a 2 × 2 between-participants design, a significance level of 0.05, and no clustering, the study has approximately 95% power to detect this effect.
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
University of Central Florida IRB
IRB Approval Date
2026-06-16
IRB Approval Number
STUDY00009326
Analysis Plan