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Incentives and managerial experience in multi-task teams: evidence from within a firm

Author

Listed:
  • Rachel Griffith

    (Institute for Fiscal Studies and University of Manchester)

  • Andrew Neely

    (Institute for Fiscal Studies)

Abstract

This paper exploits a quasi-experimental setting to estimate the impact that a multi-dimensional group incentive scheme had on branch performance in a large distribution firm. The scheme, which is based on the Balanced Scorecard, was implemented in all branches in one division, but not in another. Branches from the second division are used as a control group. Our results suggest that the balanced scorecard had some impact, but that it varied with branch characteristics, and in particular, branches with more experienced managers were better able to respond to the new incentives.

Suggested Citation

  • Rachel Griffith & Andrew Neely, 2006. "Incentives and managerial experience in multi-task teams: evidence from within a firm," IFS Working Papers W06/22, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:06/22
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    File URL: http://www.ifs.org.uk/wps/wp0622.pdf
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    References listed on IDEAS

    as
    1. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(2), pages 261-294.
    2. Norreklit, Hanne, 2003. "The Balanced Scorecard: what is the score? A rhetorical analysis of the Balanced Scorecard," Accounting, Organizations and Society, Elsevier, vol. 28(6), pages 591-619, August.
    3. Knez, Marc & Simester, Duncan, 2001. "Firm-Wide Incentives and Mutual Monitoring at Continental Airlines," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 743-772, October.
    4. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1039-1061.
    5. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
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    Cited by:

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    2. Susan Helper & Morris M. Kleiner & Yingchun Wang, 2010. "Analyzing Compensation Methods in Manufacturing: Piece Rates, Time Rates, or Gain-Sharing?," NBER Working Papers 16540, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

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    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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