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Author: David J. Cooper Publisher: ISBN: Category : Languages : en Pages : 50
Book Description
Many incentive contracts are inherently ambiguous, lacking an explicit mapping between performance and pay. Using an online labor market, Amazon Mechanical Turk, we study the effect of ambiguous incentives on willingness to accept contracts to do a real-effort task, the probability of completing the task, and performance at the task. Even modest levels of ambiguity about the relationship between performance and pay are sufficient to eliminate the positive selection effect associated with piece rates, as high ability individuals are no more likely than low ability individuals to accept a contract. Piece rate contracts significantly improve performance relative to fixed wages, primarily due to selection, but this positive effect is not present with ambiguous incentive contracts. Modest levels of ambiguity reduce the probability that subjects accept an incentive contract and all types of ambiguous incentive contracts increase the probability of quitting after having accepted an incentive contract. Information about individual ability at the task reduces the probability that subjects choose and complete the task.
Author: David J. Cooper Publisher: ISBN: Category : Languages : en Pages : 50
Book Description
Many incentive contracts are inherently ambiguous, lacking an explicit mapping between performance and pay. Using an online labor market, Amazon Mechanical Turk, we study the effect of ambiguous incentives on willingness to accept contracts to do a real-effort task, the probability of completing the task, and performance at the task. Even modest levels of ambiguity about the relationship between performance and pay are sufficient to eliminate the positive selection effect associated with piece rates, as high ability individuals are no more likely than low ability individuals to accept a contract. Piece rate contracts significantly improve performance relative to fixed wages, primarily due to selection, but this positive effect is not present with ambiguous incentive contracts. Modest levels of ambiguity reduce the probability that subjects accept an incentive contract and all types of ambiguous incentive contracts increase the probability of quitting after having accepted an incentive contract. Information about individual ability at the task reduces the probability that subjects choose and complete the task.
Author: Lucian A. Bebchuk Publisher: Harvard University Press ISBN: 9780674020634 Category : Business & Economics Languages : en Pages : 308
Book Description
The company is under-performing, its share price is trailing, and the CEO gets...a multi-million-dollar raise. This story is familiar, for good reason: as this book clearly demonstrates, structural flaws in corporate governance have produced widespread distortions in executive pay. Pay without Performance presents a disconcerting portrait of managers' influence over their own pay--and of a governance system that must fundamentally change if firms are to be managed in the interest of shareholders. Lucian Bebchuk and Jesse Fried demonstrate that corporate boards have persistently failed to negotiate at arm's length with the executives they are meant to oversee. They give a richly detailed account of how pay practices--from option plans to retirement benefits--have decoupled compensation from performance and have camouflaged both the amount and performance-insensitivity of pay. Executives' unwonted influence over their compensation has hurt shareholders by increasing pay levels and, even more importantly, by leading to practices that dilute and distort managers' incentives. This book identifies basic problems with our current reliance on boards as guardians of shareholder interests. And the solution, the authors argue, is not merely to make these boards more independent of executives as recent reforms attempt to do. Rather, boards should also be made more dependent on shareholders by eliminating the arrangements that entrench directors and insulate them from their shareholders. A powerful critique of executive compensation and corporate governance, Pay without Performance points the way to restoring corporate integrity and improving corporate performance.
Author: Qi Liu Publisher: ISBN: Category : Languages : en Pages : 34
Book Description
This paper studies a principal-agent model in which the information on future firm performance is ambiguous and the agent is averse to ambiguity. We show that if firm risk is ambiguous, while stocks always induce the agent to perceive a high risk, options can induce him to perceive a low risk. As a result, options can be less costly in incentivizing the agent than stocks in the presence of ambiguity. In addition, we show that providing the agent with more incentives would induce the agent to perceive a higher risk, and there is a discontinuous jump in the compensation cost as incentives increase, which makes the principal reluctant to reset contracts frequently when underlying fundamentals change. Thus, compensation contracts exhibit an inertia property. Lastly, the model sheds some light on the use of relative performance evaluation, and provides a rationale for the puzzle of pay-for-luck in the presence of ambiguity.
Author: Chan Su Jung Publisher: Edward Elgar Publishing ISBN: 178897185X Category : Political Science Languages : en Pages : 374
Book Description
Chan Su Jung provides a thorough review of goal ambiguity in the public sector, exploring the general assertions, arguments and empirical evidence regarding performance goal ambiguity, particularly highlighting its causes, consequences, and mediation effects. The author proposes a new conceptual framework for successful analysis of goal ambiguity that can effectively relate to diverse organizational and program characteristics.
Author: Andrew J. DuBrin Publisher: Page Publishing Inc ISBN: 164298776X Category : Business & Economics Languages : en Pages : 224
Book Description
Tolerating Ambiguity for Leadership and Professional Effectiveness focuses on an underaEUR"publicized success factor in work and personal life. As the world of work has become more uncertain and rapidly changing, the ability to tolerate ambiguity as well as thrive from it has gained in importance as a trait and behavior for leaders, managers, and individual contributors. The purpose of the book is to enhance the reader's tolerance for ambiguity as a method of fortifying his or her leadership and professional effectiveness. The book describes relevant research and opinion about many aspects of tolerating ambiguity. Each chapter contains a few ideas for dealing better with ambiguity, and the final chapter presents a comprehensive list of suggestions for becoming more effective at dealing with ambiguity. SelfaEUR"quizzes are presented in ten chapters to help you personalize the major chapter theme under consideration. All key points throughout the book are illustrated with examples, including references to identified individuals and business organizations. The major contribution of the book is its systematic presentation of applied information related to tolerating ambiguity, such as the payoffs from tolerating ambiguity, the attributes and actions of people who tolerate ambiguity, enhancing leadership effectiveness, and the facilitation of creativity and innovation. The book also includes a master plan for applying the information about ambiguity tolerance to serve as a guideline toward action.
Author: National Research Council Publisher: National Academies Press ISBN: 0309044278 Category : Business & Economics Languages : en Pages : 221
Book Description
"Pay for performance" has become a buzzword for the 1990s, as U.S. organizations seek ways to boost employee productivity. The new emphasis on performance appraisal and merit pay calls for a thorough examination of their effectiveness. Pay for Performance is the best resource to date on the issues of whether these concepts work and how they can be applied most effectively in the workplace. This important book looks at performance appraisal and pay practices in the private sector and describes whetherâ€"and howâ€"private industry experience is relevant to federal pay reform. It focuses on the needs of the federal government, exploring how the federal pay system evolved; available evidence on federal employee attitudes toward their work, their pay, and their reputation with the public; and the complicating and pervasive factor of politics.
Author: Joe Burke Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
Research suggests that employees work harder under penalty contracts than under economically equivalent bonus contracts. We build on this literature by examining how the motivational advantage of penalty contracts depends on a common aspect of real-world contracts: payoff ambiguity. With payoff ambiguity, employees provide effort without knowing how much pay they will receive for a given level of performance. According to our theory, this ambiguity opens the door for employee optimism, which has contrasting effects under each contract frame. Results from an experiment support this theory, with an increase in ambiguity leading to less employee effort with penalty contracts (as employees optimistically expect small penalties) and to more effort with bonus contracts (as employees optimistically expect large bonuses). We also find that these effects are stronger for more dispositionally optimistic employees. Overall, our results suggest that bonus contracts may be more motivating and penalty contracts less motivating than previously thought.
Author: David J. Cooper
Author: David J. Cooper
Author: Lucian A. Bebchuk
Author: Robert Wood
Author: Qi Liu
Author: Chan Su Jung
Author: Dr. Priya Baguant
Author: Andrew J. DuBrin
Author: Priscilla Weber Riter
Author: National Research Council
Author: Joe Burke