Performance measure properties and incentive system design

Industrial Relations

Volumn 48, Issue 2, 2009, Pages 237-264

  Gibbs, Michael J ^a,e   Merchant, Kenneth A ^b   Van Der Stede, Wim A ^c   Vargus, Mark E ^d  

^a UNIVERSITY OF CHICAGO   (United States)

^b UNIVERSITY OF SOUTHERN CALIFORNIA   (United States)

^c LONDON SCHOOL OF ECONOMICS   (United Kingdom)

^d UNIVERSITY OF TEXAS AT DALLAS   (United States)

^e IZA   (Germany)

Author keywords

[No Author keywords available]

Indexed keywords

CORPORATE STRATEGY; DESIGN; INCENTIVE; INDUSTRIAL PRACTICE; PERFORMANCE ASSESSMENT;

EID: 60649116351     PISSN: 00198676     EISSN: 1468232X     Source Type: Journal    
DOI: 10.1111/j.1468-232X.2009.00556.x     Document Type: Article

References (35)

1. Baker, George. 1992. "Incentive Contracts and Performance Measurement." Journal of Political Economy 100 (3): 598-614.
2. Baker, George. 2002. "Distortion and Risk in Optimal Incentive Contracts." Journal of Human Resources 37 (4): 728-52.
3. Baker, George, and Bjorn Jorgensen. 2003. "Volatility, Noise and Incentives." Working Paper, Harvard Business School.
4. Baker, George, Robert Gibbons, and Kevin J. Murphy. 1994. "Subjective Performance Measures in Optimal Incentive Contracts." Quarterly Journal of Economics 109 (4): 1125-56.
5. Banker, Rajiv D. and Srikant M. Datar. 1989. "Sensitivity, Precision, and Linear Aggregation of Signals for Performance Evaluation." Journal of Accounting Research 27 (Spring): 21-39.
6. Bertrand, Marianne, and Sendhil Mullainathan. 2001. "Do People Mean What They Say? Implications for Subjective Survey Data." American Economic Review Papers and Proceedings 67-72.
7. Bouwens, Jan, and Laurence van Lent. 2006. "Performance Measure Properties and the Effect of Incentive Contracts." Journal of Management Accounting Research 18 (1): 55-75.
8. Bouwens, Jan, and Laurence van Lent.. 2008. "Assessing the Performance of Business Unit Managers." Journal of Accounting Research 45 (4): 667-97.
9. Bushman, Robert, Raffi Indjejikian, and Abbie Smith. 1996. "CEO Compensation: The Role of Individual Performance Evaluation." Journal of Accounting and Economics 21 (April): 161-93.
10. Campbell, Dennis. 2008. "Nonfinancial Performance Measures and Promotion-Based Incentives." Journal of Accounting Research 46 (2): 297-332.
11. Courty, Pascal, and Gerald Marschke. 2004. "An Empirical Investigation of Gaming Responses to Explicit Performance Incentives." Journal of Labor Economics 22 (1): 23-56.
12. Courty, Pascal, and Gerald Marschke. 2008. "A General Test of Gaming." Review of Economics & Statistics 90 (3): 428-41.
13. Demski, Joel S., Hans Frimor, and David E. M. Sappington. 2004. "Efficient Manipulation in a Repeated Setting." Journal of Accounting Research 42 (1): 31-49.
14. DeVaro, Jed, and Fidan Ana Kurtulus. 2006. "An Empirical Analysis of Risk, Incentives, and the Delegation of Worker Authority." Working Paper, Cornell University.
15. Feltham, Gerald A., and Jim Xie. 1994. "Performance Measure Congruity and Diversity in Multi-task Principal/Agent Relations." The Accounting Review 69 (3): 429-53.
16. Gibbs, Michael, Kenneth A. Merchant, Wim A. Van der Stede, and Mark E. Vargus. 2004. "Determinants and Effects of Subjectivity in Incentives." The Accounting Review 79 (2): 409-36.
17. Hayes, Rachel M., and Scott Schaefer. 2000. "Implicit Contracts and the Explanatory Power of Top Executive Compensation for Future Performance." RAND Journal of Economics 31 (2): 273-93.
18. Healy, Paul M. 1985. "The Effect of Bonus Schemes on Accounting Decisions." Journal of Accounting and Economics 7: 85-107.
19. Hemmer, Thomas. 1996. "On the Design and Choice of 'Modern' Management Accounting Measures." Journal of Management Accounting Research (8): 87-116.
20. Holmstrom, Bengt. 1979. "Moral Hazard and Observability." Bell Journal of Economics 10: 74-91.
21. Holmstrom, Bengt, and Paul Milgrom. 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design." Journal of Law, Economics, and Organization 7: 24-52.
22. Holthausen, Robert, David Larcker, and Richard Sloan. 1995. "Annual Bonus Schemes and the Manipulation of Earnings." Journal of Accounting and Economics, 19: 29-74.
23. Ichniowski, Casey, Kathryn Shaw, and Giovanni Prennushi. 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines." American Economic Review 87 (3): 291-313.
24. Ittner, Christopher D., and David F. Larcker. 2002. "Determinants of Performance Measure Choices in Worker Incentive Plans." Journal of Labor Economics 20 (2): S58-91.
25. Ittner, Christopher D., David F. Larcker, and Madhav V. Rajan. 1997. "The Choice of Performance Measures in Annual Bonus Contracts." The Accounting Review 72 (2): 231-55.
26. Jensen, Michael, and William Meckling. 1992. "Specific and General Knowledge and Organizational Structure." In Contract Economics, edited by Lars Werin and Hans Wijkander. Oxford: Blackwell.
27. MacLeod, Bentley, and Daniel Parent. 1999. "Job Characteristics and the Form of Compensation." Research in Labor Economics 18: 177-242.
28. Murphy, Kevin J., and Paul Oyer. 2003. "Discretion in Executive Incentive Contracts." Working Paper, USC.
29. Prendergast, Canice. 1999. "The Provision of Incentives Within Firms." Journal of Economic Literature 37 (1): 7-63.
30. Prendergast, Canice. 2002. "The Tenuous Tradeoff between Incentives and Risk." Journal of Political Economy 110 (5): 1071-102.
31. Raith, Michael. 2003. "Competition, Risk, and Managerial Incentives." American Economic Review 93: 1425-36.
32. Raith, Michael. 2008. "Specific Knowledge and Performance Measurement." Working Paper, University of Rochester.
33. Shi, Lan. 2008. "Respondable Risk and Incentives for CEOs: The Role of Information-collection and Decision-making." Working Paper, University of Washington.
34. Slade, Margaret. 1996. "Multitask Agency and Contract Choice." International Economic Review 37 (2): 465-86.
35. Van Praag, Mirjam, and Kees Cools. 2001. "Performance Measure Selection: Aligning the Principal's Objective and the Agent's Effort." Working Paper, University of Amsterdam.