Discretion In Managerial Bonus Pools
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Discretion In Managerial Bonus Pools
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Author : Merle Ederhof
language : en
Publisher: Now Publishers Inc
Release Date : 2011
Discretion In Managerial Bonus Pools written by Merle Ederhof and has been published by Now Publishers Inc this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with Business & Economics categories.
Discretion in Managerial Bonus Pools synthesizes and integrates a growing literature that has emerged over the past 10-15 years on the use of both objective and subjective performance indicators in managerial incentive plans. The authors examine the structure of efficient bonus pools (fixed payment schemes) in the presence of subjective performance indicators. The analysis covers a range of scenarios including single- and multi-agent settings, the interplay of objective and subjective indicators and short-term as opposed to long-term contracting relations. To synthesize the existing research, the authors frame their exposition around five recurring themes which collectively speak to the structure and the efficiency of incentive schemes based on subjective information i. Value of Subjective Performance Indicators. ii. Incremental Agency Cost. iii.Compression of Optimal Incentive Contracts. iv. Optimality of Proper Bonus Pools. v. Value of Multiperiod Contracting
Dividing The Pie
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Author : Wendy J. Bailey
language : en
Publisher:
Release Date : 2012
Dividing The Pie written by Wendy J. Bailey and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.
Research indicates that bonus plans can provide effective incentives when managers use discretion to incorporate non-contracted information into performance evaluations. The use of managerial discretion, however, draws concern about whether non-contracted information is used appropriately in performance evaluations (Baiman and Rajan 1995; Fisher et al. 2005). This paper provides experimental evidence regarding the decision processes through which managers apply discretion in allocating bonus pools. Additionally, we investigate whether the design of the bonus plan affects managers' bonus allocations. Our theory and evidence suggest that managers rely on an anchoring and adjustment heuristic to allocate bonus pools and that the bonus plan type (i.e., whether managers have full or partial discretion) influences managers' choice of anchor information. Regardless of anchor information, managers' subsequent adjustment is insufficient, resulting in a failure to fully incorporate non-contracted information. Even for those managers who do not rely on an anchoring and adjustment heuristic but instead attempt to perform comprehensive calculations, only those with full discretion fully incorporate non-contracted information.
In Search Of Informed Discretion
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Author : Victor S. Maas
language : en
Publisher:
Release Date : 2011
In Search Of Informed Discretion written by Victor S. Maas and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
This paper investigates managerial discretion in compensation decisions in a team (i.e., joint production) setting. Specifically, we investigate the conditions under which managers tasked with allocating a discretionary bonus pool are willing to incur a personal cost to obtain ex post non-contractible information about the individual effort levels of of team members. Using theory from behavioral economics that incorporates preferences for fairness into the manager's utility function, we predict and demonstrate experimentally that managers' willingness to incur such a cost increases as the team's aggregate performance becomes less extreme (i.e., as the team's aggregate performance becomes a more noisy measure of individual performance). Further, using theory that incorporates preferences for trust reciprocity into the manager's utility function, we predict and demonstrate experimentally that managers' willingness to incur the cost will be greater for relatively high vs. relatively low levels of aggregate performance. The study contributes to the existing literature on subjective performance evaluation by identifying how social preferences influence managers' use of discretion in evaluation processes.
Objective Versus Subjective Indicators Of Managerial Performance
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Author : Madhav V. Rajan
language : en
Publisher:
Release Date : 2008
Objective Versus Subjective Indicators Of Managerial Performance written by Madhav V. Rajan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with categories.
Managerial bonus payments are frequently determined by both objective and subjective indicators of managerial performance. By its very nature, subjective information is not verifiable for contracting purposes. The inclusion of such information in managerial bonus schemes therefore requires a principal to retain discretion in authorizing actual bonus payments. At the same time, the principal must be able to commit to an overall bonus pool which will be paid out either inside or outside the agency. Our analysis examines the structure of optimal bonus pool arrangements. The non-verifiability of the subjective indicators changes many of the predictions obtained in traditional agency settings with verifiable performance indicators. In particular, our results address the contractual value of additional information variables, the desirability of compressed incentive schemes and the nature of relative performance evaluation in settings with multiple agents.
Contemporary Issues In Management Accounting
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Author : Alnoor Bhimani
language : en
Publisher: OUP Oxford
Release Date : 2006-03-09
Contemporary Issues In Management Accounting written by Alnoor Bhimani and has been published by OUP Oxford this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006-03-09 with Business & Economics categories.
The book comprehensively covers established and emerging areas in the fast changing field of Management Accounting. Well established accounting of practices such as budgeting, costing, responsibility accounting and capital investment analysis are discussed alongside innovative and emerging accounting based approaches to organizational control.
The Routledge Companion To Behavioural Accounting Research
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Author : Theresa Libby
language : en
Publisher: Routledge
Release Date : 2017-11-06
The Routledge Companion To Behavioural Accounting Research written by Theresa Libby and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-11-06 with Business & Economics categories.
Behavioural research is well established in the social sciences, and has flourished in the field of accounting in recent decades. This far-reaching and reliable collection provides a definitive resource on current knowledge in this new approach, as well as providing a guide to the development and implementation of a Behavioural Accounting Research project. The Routledge Companion to Behavioural Accounting Research covers a full range of theoretical, methodological and statistical approaches relied upon by behavioural accounting researchers, giving the reader a good grounding in both theoretical perspectives and practical applications. The perspectives cover a range of countries and contexts, bringing in seminal chapters by an international selection of behavioural accounting scholars, including Robert Libby and William R. Kinney, Jr. This book is a vital introduction for Ph.D. students as well as a valuable resource for established behavioural accounting researchers.
Program And Proceedings
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Author : American Accounting Association
language : en
Publisher:
Release Date : 2006
Program And Proceedings written by American Accounting Association and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with Accounting categories.
Construction Guide
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Author : Eric P. Wallace
language : en
Publisher: CCH
Release Date : 2008
Construction Guide written by Eric P. Wallace and has been published by CCH this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with Business & Economics categories.
Construction Guide provides CPAs with guidance on the accounting, auditing, and reporting that are particular to the construction industry. In addition, it provides CPAs with guidance on engagements for a wide range of situations, including those special to utility contractors, road builders, home construction, home builders, real estate developers, commercial construction, residential construction, and more. The book includes work programs, practice aids, checklists, and sample reports.
Compensation And Reward Management Second Edition
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Author :
language : en
Publisher: Excel Books India
Release Date :
Compensation And Reward Management Second Edition written by and has been published by Excel Books India this book supported file pdf, txt, epub, kindle and other format this book has been release on with categories.
Senior Executive Reward
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Author : Dr Sandy Pepper
language : en
Publisher: Gower Publishing, Ltd.
Release Date : 2012-09-28
Senior Executive Reward written by Dr Sandy Pepper and has been published by Gower Publishing, Ltd. this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-09-28 with Business & Economics categories.
Executive pay remains a contentious topic for many organizations. Unfortunately for company executives, much of the writing about it is either sensationalist or highly academic; none of it much help to the reader looking for a balanced and informed view of the subject. Sandy Pepper provides company executives, investors, and advisers with a summary of the main theories (from economics, game theory and the behavioural sciences) and best practices (in corporate governance, tax, accounting, compliance and so on) that relate to the compensation of senior executives. He also reviews the current state of corporate governance as it affects executive reward in Europe and the US. And he backs the text up with case study examples. Senior Executive Reward is an intelligent, practical and balanced explanation of the basis on which modern executives are compensated - and why. It is must-have reading for anyone who is interested in the complex and often controversial topic of executive pay, particularly remuneration committee members, professional advisers and senior executives anxious to understand for themselves (and explain to others) the basis on which they are rewarded.