Performance Measure Properties And The Effect Of Incentive Contracts
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Performance Measure Properties And The Effect Of Incentive Contracts
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Author : Jan Bouwens
language : en
Publisher:
Release Date : 2006
Performance Measure Properties And The Effect Of Incentive Contracts written by Jan Bouwens and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
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.
Performance Measure Properties And Incentive System Design
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Author : Michael Gibbs
language : en
Publisher:
Release Date : 2009
Performance Measure Properties And Incentive System Design written by Michael Gibbs and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
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.
Incentive Contracts And Performance Measurement
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Author : George P. Baker
language : en
Publisher:
Release Date : 1991
Incentive Contracts And Performance Measurement written by George P. Baker and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1991 with Employees categories.
Incentive Contracts And Performance Measurement
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Author : George Pierce Baker
language : en
Publisher:
Release Date : 1990
Incentive Contracts And Performance Measurement written by George Pierce Baker and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1990 with Incentives in industry categories.
How Incentive Contracts And Task Complexity Influence And Facilitate Long Term Performance
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Author : Leslie Berger
language : en
Publisher:
Release Date : 2009
How Incentive Contracts And Task Complexity Influence And Facilitate Long Term Performance written by Leslie Berger and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
Optimal Incentives And The Time Dimension Of Performance Measurement
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Author : Michael Raith
language : en
Publisher:
Release Date : 2009
Optimal Incentives And The Time Dimension Of Performance Measurement written by Michael Raith and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
In many occupations, the consequences of agents' actions become known only over time. Firms can then pay agents based on early but noisy performance measures, or later but more accurate ones. I study this choice within a two-period model in which an agent's action generates an output with delay, and a noisy signal of output early. While the signal is useful for early consumption decisions, it is not clear that the signal is useful for incentive contracting if the agent has access to credit. I show, however, that under very general conditions the optimal contract depends on the early signal as well as on output even if the signal is uninformative of effort, given output, and even if the agent has perfect access to credit. An important characteristic of any performance measure, therefore, is the time at which it is generated. The results shed light on the use of forward-looking performance measures such as stock returns in managerial incentive contracts.
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
Subjective Performance Measures In Optimal Incentive Contracts
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Author : George Baker
language : es
Publisher:
Release Date : 1993
Subjective Performance Measures In Optimal Incentive Contracts written by George Baker and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1993 with categories.
The Effects Of Non Financial Performance Measures In A Bonus Contract
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Author : Elizabeth Connors
language : en
Publisher:
Release Date : 2004
The Effects Of Non Financial Performance Measures In A Bonus Contract written by Elizabeth Connors and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Bonuses (Employee fringe benefits) categories.
Timeliness Accuracy And Relevance In Dynamic Incentive Contracts
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Author : PETER O. CHRISTENSEN; GERALD A. FELTHAM; CHRISTIAN.
language : en
Publisher:
Release Date : 2022
Timeliness Accuracy And Relevance In Dynamic Incentive Contracts written by PETER O. CHRISTENSEN; GERALD A. FELTHAM; CHRISTIAN. and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with BUSINESS & ECONOMICS categories.
Timeliness, Accuracy, and Relevance in Dynamic Incentive Contracts examines managerial performance measures from the perspective of timeliness, accuracy, and relevance in multi-period incentive problems. The authors use a simple linear framework where managerial actions do not affect risk and compare and contrast consumption risk for a manager's preferences with single and multiple consumption dates, respectively.Both full commitment to and renegotiation of long-term contracts are considered. Under full commitment, timely and accurate information is usually relevant and desirable; the only differences arise from the modeling of managerial preferences, through the manager's consumption risk. In particular, the timeliness of performance reports can be irrelevant; then, delaying reports is desirable if it can increase their accuracy. Under renegotiation of long-term contracts, the timeliness of information release relative to renegotiation is essential. Any information released prior to renegotiation is incorporated into an ex post efficient (renegotiated) contract and is particularly useful in insuring the manager against future consumption risk. Delayed reporting destroys this insurance value and can make late reports irrelevant, independent of the modeling of managerial preferences. But timely reports can create ex ante inefficient action incentives for managers, and then accuracy can be costly as well.