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Performance measure aggregation – two action levels

Author

Listed:
  • Junwook Yoo

    (Sungkyunkwan University)

  • Igor Semenenko

    (Acadia University)

Abstract

In practice, effort is often measured in two levels due to the simplicity. When employees' actions are restricted to two levels, this study shows that the basic measures can be aggregated into a one-dimensional sufficient aggregate without losing any information from the basic measures. The format of the one-dimensional sufficient aggregate is determined only by the statistical properties of the basic measures and the one-dimensional sufficient aggregate can be uniformly used regardless of organizational particulars. By using the one-dimensional sufficient aggregate, complexity of performance evaluation systems can be reduced and efficiency of motivating employees through performance evaluation can be substantially improved.

Suggested Citation

  • Junwook Yoo & Igor Semenenko, 2021. "Performance measure aggregation – two action levels," Economics Bulletin, AccessEcon, vol. 41(2), pages 564-572.
    • Handle: RePEc:ebl:ecbull:eb-20-01131
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I2-P50.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    aggregation; performance measures; sufficiency; performance evaluation;
    All these keywords.

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration

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