Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Role of Performance Measure Characteristics in the Design of Incentive Systems: An Empirical Analysis

Contents:

Author Info

  • Moers,F

    (METEOR)

Registered author(s):

    Abstract

    In this paper, I derive three general performance measure characteristics from the literature that are theoretically related to the use of performance measures, i.e., (1) the impact that a manager has on performance (sensitivity), (2) the impact that uncontrollable factors have on performance (controllability), and (3) the degree to which the performance measure is objective and verifiable (measurement accuracy). I empirically examine the effect of information asymmetry and the performance measure characteristics on the use of three types of performance measures. Furthermore, I examine how two types of uncertainty, i.e., task uncertainty and environmental uncertainty, affect information asymmetry and performance measure characteristics. The major finding of this study is that sensitivity is positively related to the use of all three types of performance measures, while measurement accuracy is positively related to two out of these three types of performance measures. Controllability, on the other hand, does not have the proposed positive effect on any of the performance measures examined. These results suggest that sensitivity and measurement accuracy play an important role in designing incentive systems, while controllability seems to play no role.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://edocs.ub.unimaas.nl/loader/file.asp?id=371
    Download Restriction: no

    Bibliographic Info

    Paper provided by Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR) in its series Research Memorandum with number 020.

    as in new window
    Length:
    Date of creation: 2000
    Date of revision:
    Handle: RePEc:unm:umamet:2000020

    Contact details of provider:
    Postal: P.O. Box 616, 6200 MD Maastricht
    Phone: +31 (0)43 38 83 830
    Email:
    Web page: http://www.maastrichtuniversity.nl/
    More information through EDIRC

    Related research

    Keywords: accounting and auditing ;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Venky Nagar, . "Organizational Design Choices in Retail Banking," Rodney L. White Center for Financial Research Working Papers, Wharton School Rodney L. White Center for Financial Research 09-99, Wharton School Rodney L. White Center for Financial Research.
    2. Sloan, Richard G., 1993. "Accounting earnings and top executive compensation," Journal of Accounting and Economics, Elsevier, Elsevier, vol. 16(1-3), pages 55-100, April.
    3. Govindarajan, V. & Gupta, Anil K., 1985. "Linking control systems to business unit strategy: impact on performance," Accounting, Organizations and Society, Elsevier, vol. 10(1), pages 51-66, January.
    4. Gordon, Lawrence A. & Narayanan, V. K., 1984. "Management accounting systems, perceived environmental uncertainty and organization structure: An empirical investigation," Accounting, Organizations and Society, Elsevier, vol. 9(1), pages 33-47, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Rose, Timothy & Manley, Karen, 2011. "Motivation toward financial incentive goals on construction projects," Journal of Business Research, Elsevier, Elsevier, vol. 64(7), pages 765-773, July.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:unm:umamet:2000020. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Charles Bollen).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.