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Trial Title Employee Reactions to Company Policy Change Employee Reactions to Company Policy Change: The Effect of Policy Direction and Managerial Justification
Abstract This study examines how organizational policy changes, specifically, the decision to either abandon or expand prior sustainability and diversity, equity, and inclusion (DEI) commitments, affect employees' ethical behavior, with reporting honesty as the primary outcome. Drawing on psychological contract theory, we hypothesize that employees interpret sustainability and DEI commitments as implicit organizational promises, and that abandoning such commitments triggers perceived breach, eroding trust, and increasing opportunistic behavior (e.g., misreporting of time, budget padding). Doubling down on commitments is expected to reinforce trust and ethical reciprocity. We further propose that the justification framing accompanying the policy change (business-case vs. moral) moderates these effects. 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.
Last Published July 27, 2026 07:03 AM August 20, 2026 05:45 PM
Intervention (Public) The project consists of two online studies conducted through Prolific. In Study 1, 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. 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 July 27, 2026 August 31, 2026
Experimental Design (Public) The project consists of two online studies conducted through Prolific using Qualtrics. Study 1 collects organizational policy decisions from participants with managerial experience. Study 2 presents these decisions to full-time working adults, who then complete an incentivized reporting task. Participants are assigned to conditions using a factorial 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.
Randomization Method Study 1 involves no experimental manipulation or random assignment. In Study 2, all employees who complete the allocation task will be randomly assigned at the individual level to either the DEI or sustainability condition, regardless of their allocation decisions. Their prior allocation decisions may be used as an analysis filter and/or included as potential moderators or covariates. 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 Study 2 is the individual participant. Participants are first randomly assigned to either the DEI or sustainability domain and then randomly assigned to one of four experimental conditions within that domain. Study 1 involves no randomization; it surveys participants’ preferences and decisions. 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? No Yes
Planned Number of Clusters Maximum of 500 participants for Study 2. Maximum of 250 participants for revised Study 2.
Planned Number of Observations Maximum of 500 participants for Study 2; Maximum of 250 participants for revised Study 2
Intervention (Hidden) In Study 1, participants who hold managerial positions in real life are recruited to role-play as a managing partner of a consulting firm. Study 2 has 2 components (sustainability vs. diversity) that both use a 2 (abandon vs. double down) × 2 (business vs. moral justification) design. Study 1 firm partners choose an organizational initiative, decide whether to continue or scale it back, and select a business- or moral-framed justification. These decisions are communicated to matched Study 2 employees. Study 2 employees first allocate $5 between themselves and environmental and DEI charities. Some, but not all, donation decisions will be implemented. They then complete an incentivized timesheet-reporting task in which over-reporting increases their own bonus but reduces the matched partner’s bonus. Subsequent measures assess participants’ reactions, turnover intentions, manipulation checks, and demographics. 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.
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