Performance Measure Properties and Incentive System Design PDF Download

Author: Michael Gibbs
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Book Description
We analyze effects of performance measure properties (controllable and uncontrollable risk, distortion, and manipulation) on incentive plan design, using data from auto dealership manager incentive systems. Dealerships put the most weight on measures that are "better" with respect to these properties. Additional measures are more likely to be used for a second or third bonus if they can mitigate distortion or manipulation in the first performance measure. Implicit incentives are used to provide ex post evaluation, to motivate the employee to use controllable risk on behalf of the firm, and to deter manipulation of performance measures. Overall, our results indicate that firms use incentive systems of multiple performance measures, incentive instruments, and implicit evaluation and rewards as a response to weaknesses in available performance measures.

Author: Jan Bouwens
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Book Description
Using data from a third-party survey on compensation practices at 151 Dutch firms, we show that less noisy or distorted performance measures and higher cash bonuses are associated with better-directed effort and improved employee selection. Specifically, 1) an increase in the cash bonus increases the selection effects of incentive contracts, but does not independently affect the effort that employees deliver, and 2) performance measure properties directly impact both effort and the selection functioning of incentive contracts. These results hold after controlling for an array of incentive contract design characteristics and for differences in organizational context. Our estimation procedures address several known problems with using secondary datasets.

Author: Marc J. Epstein
Publisher: Emerald Group Publishing
ISBN: 1785609157
Category : Business & Economics
Languages : en
Pages : 401

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Book Description
Volume 31 of Studies in Managerial and Financial Accounting (SMFA) covers contemporary issues in performance measurement and management control.

Author: Martin Artz
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Book Description
Although conceptual research in the accounting literature suggests that the use of performance-measurement systems affects the influence of organizational actors, empirical evidence for this suggestion is largely limited to anecdotal evidence and a few qualitative case studies. Drawing on institutional theory, we develop predictions that link the use of performance measures to the influence of functional subunits in strategic decision making. Our research model tests the effects of two types of performance-measure use on functional strategic decision influence: (1) decision-facilitating use and (2) use for accountability. Moreover, we propose that the effects of using performance measures for these two purposes depend on the reliability and functional specificity of the measures the functional subunits use. We empirically test our hypotheses and a research question with survey data from 192 marketing directors of German firms. We find that the effect of performance-measure use on functional strategic decision influence depends on the two properties of the performance measures. We find no significant effects when these properties are not considered. However, decision-facilitating use of performance measures has a positive effect on functional strategic decision influence when the measures are specific to the functional subunit. With respect to the use of performance measures for accountability we find countervailing effects, as the effect on functional strategic decision influence is positive when the measures are more reliable but negative when they are more specific to the functional subunit. We discuss these findings in light of existing evidence and theory.

Author: Isabell M. Welpe
Publisher: Springer
ISBN: 3319097857
Category : Business & Economics
Languages : en
Pages : 493

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Book Description
​This book contributes to the current discussion in society, politics and higher education on innovation capacity and the financial and non-financial incentives for researchers. The expert contributions in the book deal with implementation of incentive systems at higher education institutions in order to foster innovation. On the other hand, the book also discusses the extent to which governance structures from economy can be transferred to universities and how scientific performance can be measured and evaluated. This book is essential for decision-makers in knowledge-intensive organizations and higher-educational institutions dealing with the topic of performance management.

Author: Dennis D. Fehrenbacher
Publisher: Springer Science & Business Media
ISBN: 3642335993
Category : Business & Economics
Languages : en
Pages : 265

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Book Description
Monetary incentives, as a driving force for human behavior, are the main theme of this book. The primary goals underlying the application of monetary incentive systems in companies are motivating employees to strive for superior productivity in line with the interests of employers, and hiring adequately skilled employees. The first goal refers to incentive effects, the latter to sorting effects. This book introduces important theories and concepts concerning behavior under influence of monetary incentives; it reviews existing economic frameworks and identifies specific contingency variables. Based on an integrative framework of elements influencing incentive and sorting effects, a laboratory experiment is presented including detailed methodological discussion on experimentation and data analysis as well as an extensive presentation of findings and discussion of implications.​

Author: Franz Michael Fischer
Publisher: Springer Science & Business Media
ISBN: 3834960306
Category : Business & Economics
Languages : en
Pages : 332

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Book Description
Franz Michael Fischer investigates the relationships between the application of the controllability principle and managers’ cognitive, affective, and behavioral responses. The author further explores the impact of several important contextual factors on the basic relationships and, thus, develops moderated mediation models. He reveals that the application of the controllability principle has a significant effect on role stress and role orientation which, in turn, are related to managerial performance and affective constructs.

Author: Manuel Jacoby
Publisher: GRIN Verlag
ISBN: 3346343243
Category : Business & Economics
Languages : en
Pages : 21

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Book Description
Academic Paper from the year 2018 in the subject Leadership and Human Resources - Employee Motivation, grade: 1,3, International University of Applied Sciences, language: English, abstract: If you look for any specific definitions, you will find a huge variation considering the term incentive systems. Weber paraphrases incentive systems as having the aim to encourage employees positively through their performance, with benefits for the organization to reach its stated goals and objectives. In turn, Bartscher identifies incentive systems as the sum of all created working conditions, directly or indirectly to impact the motivation and thus work performance of employees, evoking a certain desired behavior. Coherently, incentive systems aim to control behavior of employees. But they do not only support a certain behavior, such systems additionally are designed to avoid unwanted behavior. Think of any internal regulations which intent to avoid behavior patterns by providing rules and/or punishments. Furthermore, as an example, a low performance might result in a curtailed income and loss of personal reputation.

Author: Kenneth A. Merchant
Publisher:
ISBN:
Category :
Languages : en
Pages : 48

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Book Description
This paper reports the findings of an archival and field study that explores the details of the design and functioning of a complex performance evaluation and incentive system, one that bases incentive payouts on both organizational and individual performance ratings. The archival data include the annual performance ratings of over 700 high- and mid-level managers and professionals over a two-year period. We find a small correlation between the organizational and individual performance ratings, which suggests no performance evaluation halo effect. There is a tendency toward leniency in both rating elements, but the leniency is greater in the organizational portion of the plan because the individual rating is constrained by a prescribed SBU-level maximum. Because the key financial performance measure is EVA, there is no reluctance to setting performance targets below zero. There is some evidence of biases related to employee roles and ranks. And the field study portion of our study revealed great within-company variation in practice and some of the reasons for it.

Author: Lex Donaldson
Publisher: Routledge
ISBN: 1317455800
Category : Business & Economics
Languages : en
Pages : 317

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Book Description
The Meta-Analytic Organization: Introducing Statistico-Organizational Theory develops new organizational theory based upon ideas from statistics and methodology. There have been previous organizational theories based on academic disciplines such as biology, economics, and sociology. Statistico-organizational theory uniquely constructs a new organizational theory derived from ideas in statistics and psychometrics. The core idea is that errors known to occur in social science research must also occur when managers look at their data and seek to make inferences about cause and effect. Statistico-organizational theory uses methodological principles to predict when errors will occur and how great they will be. The book offers new theoretical propositions about organizational strategy and structure, human resource management, international business and franchising.