The Effect of Reward and Punishment Schemes on Performance: Risk Preference as Moderator among Accounting Students

This study examines the effects of reward and punishment schemes on performance and investigates whether risk preference moderates these relationships. The study used a 3 × 2 between-subjects factorial design involving undergraduate accounting students with an auditing concentration at Universitas Islam Negeri Sultan Syarif Kasim Riau. The three compensation conditions were reward, neutral, and punishment, while risk preference was classified as risk taker or risk averse. 74 students participated initially, and 52 observations remained after the manipulation check. The hypotheses were examined using analysis of variance (ANOVA). The reported results indicate a significant main effect of the reward condition on performance (F = 5.443, p = .025) and a significant main effect of risk preference (F = 8.313, p = .006). The punishment condition was not statistically significant (F = 1.565, p = .221), and neither the reward x risk-preference interaction (F = 0.452, p = .506) nor the punishment x risk-preference interaction (F = 1.130, p = .297) was statistically significant. The findings therefore provide evidence of differences associated with reward framing and risk preference in the reported sample, but not for the two interaction effects.