Ensuring Employees' IT Compliance: Carrot or Stick?

TLDR

With reward (carrot) and punishment (stick) widely applied by organizations to regulate mandatory IT usage, it is imperative to understand how these incentives influence employee compliance behavior. The study investigates how regulatory focus, reward expectancy, and punishment expectancy relate to employee compliance with mandatory IT systems. Using control theory and regulatory focus theory, the authors surveyed 186 employees in ERP‑mandated companies to examine these relationships. Results show that punishment expectancy strongly predicts compliance, while reward expectancy alone does not; moreover, reward expectancy is moderated by promotion focus and punishment expectancy by prevention focus, underscoring the role of regulatory focus.

Abstract

With reward (carrot) and punishment (stick) widely applied by organizations to regulate mandatory IT usage, it is imperative to understand how these incentives influence employee compliance behavior. Drawing upon control theory and regulatory focus theory, this study investigates the relationships among regulatory focus, reward, punishment, and compliance behavior in mandatory IT settings. Survey data were collected from 186 employees in companies where enterprise resource planning (ERP) compliance was mandated. Analyses reveal that punishment expectancy is a strong determinant of compliance behavior, whereas the main effect of reward expectancy is not significant. Moreover, the relationship between reward expectancy and compliance behavior is moderated by promotion focus and the relationship between punishment expectancy and compliance behavior is moderated by prevention focus. This study provides an in-depth understanding of reward and punishment in mandatory IT settings and suggests that regulatory focus plays an important role in affecting employees' compliance with organizational controls.