Academy of Management Journal
Stephen Stubben, Ethan Burris, Taeya Howell, Kyle Welch
School of Accounting
Abstract
Employees often raise concerns to managers based on what they hear from others, rather than their own experiences. Conventional wisdom suggests that managers should discount these “secondhand” reports. However, after analyzing over two million reports made through internal reporting systems to publicly traded U.S. companies, we find that managers are actually more likely to find secondhand reports credible and take action on them, compared to firsthand reports. To understand this surprising result, we conducted a series of experiments. The findings suggest that managers view firsthand reports as less credible, assuming the employee may be acting in self interest. In contrast, secondhand reports are seen as more credible, as managers believe that only legitimate concerns are likely to be passed along. This has important implications for both researchers and managers in understanding how employee feedback should be handled.
