... papers and positions them in relation to prior research and ongoing discussions in the field. Drawing on the “three-legged stool” model that captures the relationships between performance measurement system, incentives, and organizational structure/corporate governance, we suggest potential research...

... of this manuscript received the Andrews Best Paper Award at the 2017 AAA Ohio Region Meeting. sub-group identification superordinate group identification helping behaviors incentives Much research in accounting and economics examines the relationship between formal and informal controls, often...

... of decentralization, (2) flexible resource allocations without fixed timelines, (3) relative target setting, and (4) weak individual incentives. Second, we find evidence suggesting that many BB implementers find it difficult to reduce the reliance on a fixed annual budget for decision making and on financial...

...Thomas R. Kubick; Courtney E. Yazzie ABSTRACT Relative performance evaluation (RPE) is a common practice in compensation contracting, essentially conditioning management compensation on the achievement of certain performance goals relative to a benchmark. In this paper, we examine the incentive...

...Sara Bormann ABSTRACT This paper examines how relations among organizational design choices (subjective performance evaluation, delegation, incentive intensity) vary with strategic priorities. In particular, I examine firms' organizational designs when multiple strategies are followed and managers...

... measures for top management and middle managers respectively, it may reduce the incentives for the two parties to coordinate with each other. We expect a firm's decision to tailor performance measurement between top management and middle managers to be driven by this cost-benefit trade-off. Using hand...

...Pablo Casas-Arce; Raffi J. Indjejikian; Michal Matějka ABSTRACT We use survey data to estimate the effect of the 2008–2009 recession on three fundamental bonus plan choices. We find robust evidence that the recession (1) reduced incentive strength, (2) increased the relative incentive weight...

...Ivar Friis ABSTRACT According to organizational economists, the implementation of market-like control mechanisms, such as transfer prices, can never completely replicate the market since “the use of high-powered incentives in firms is inherently subject to corruption” ( Williamson 1985 , 140...

...Leslie Berger ABSTRACT In this study, I investigate whether the effectiveness of rewarding performance of nonfinancial measures varies across levels of task complexity. I use a multi-period experiment where participants are assigned a highly or moderately complex task and an incentive contract...

... of incentives available to their managers that they are not eligible to share in, is likely to induce inequity aversion and dishonest budgeting. However, we expect the egocentric bias will make managers insensitive to this increased dishonesty when using budgets for planning purposes. Second, we predict...

... frameworks that motivate most prior work on target setting—the goal-setting theory and agency theory. Below, I review their main insights and discuss the similarities and differences. 2018 performance targets budgetary slack target ratcheting incentives retention One of the most time...

... managers is an important determinant of WUPB. In contrast to most prior work, we examine not only overall incentive strength but also the extent to which bonuses are based on financial targets as opposed to nonfinancial targets or subjective evaluation. This is motivated by management accounting...

... State University, The University of Arizona, University of Michigan, and University of Southern California for their helpful comments and suggestions. The authors thank Store24 for use of its data. balanced scorecard performance measurement incentives Management control theories argue...

... adjustment subjectivity incentives Goal setting represents a critical component of the control system of many organizations. There is considerable evidence that setting specific and difficult goals motivates increased performance as long as individuals remain committed to their goals and have...

...Steffen Reichmann; Anna Rohlfing-Bastian ABSTRACT To provide efficient incentives, the three components of an incentive system (i.e., performance measurement, rewards, and the allocation of decision rights) need to be balanced against each other. In practice, the authority to decide...

... for their use of performance measurement and incentive compensation. Analysis of survey data of 387 firms shows that more than half of the sample to some extent or fully mixes strategic priorities, while strategic priorities resembling strategic archetypes (primarily low cost or differentiation...

...Leslie Berger; Kenneth J. Klassen; Theresa Libby; Alan Webb ABSTRACT Tournament incentive schemes involve individuals competing against each other for a single or limited number of rewards (e.g., promotion, bonus, pay raise). Although research shows tournament schemes can have positive effects...