Effortful vs. Opportunistic Consumption of Discretionary Time: How Time-Reporting Decisions Influence Extra-Role Effort

Employees often work under incomplete contracts, performing both contracted in-role tasks and valuable but noncontracted extra-role activities. Once employees have completed in-role tasks, discretionary time remains, which they may allocate to extra-role activities or consume opportunistically. This study examines how managers’ time-reporting decisions, as a less intrusive form of control, affect subordinates’ effort-allocation decisions. I propose two opposing predictions. First, managers’ control implementations may signal distrust, resulting in more opportunism and thus less extra-role effort. Second, I identify value signaling as a novel theoretical mechanism through which time-reporting decisions may increase extra-role effort. The main experiment manipulated two factors: the type of time report (aggregated versus disaggregated) and its implementation source (managerial choice versus random assignment) to isolate signaling effects from monitoring effects. Results reveal that when managers choose not to implement disaggregated time reporting—that is, reports that make discretionary time salient—subordinates significantly reduce their extra-role effort. Structural equation modeling shows that value signaling outweighs distrust signaling in driving employees’ effort-allocation decisions. In contrast, when the time-reporting format is randomly assigned, effort remains unchanged, underscoring the signaling role of managerial choice. An additional online experiment shows directionally consistent results with the main experiment. These findings reveal a hidden cost of not controlling and contribute to the literature on incomplete contracts, slack resources, and input-based controls in modern work contexts. This paper was accepted by Ranjani Krishnan, accounting. Funding: This work was supported by the Bijzonder Onderzoeksfonds UGent [Grant BOF/STA/202009/047]. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2025.00955 .