Distorted performance measures in compensation contracts elicit suboptimal behavioral responses that may even prove to … whether the widely used class of Residual Income based performance measures - such as Economic Value Added (EVA) - is … economic circumstances and the self-selection of firms using EVA. Our findings indicate that EVA is a distorted performance …

Baker (2002) has demonstrated theoretically that the quality of performance measures used in compensation contracts … noise and distortion of a performance measure can be measured. Courty and Marschke (2007) have recently developed an elegant … empirical test to detect distortion, based on the degradation of a performance measure subsequent to increasing its weight in …

When verifiable performance measures are imperfect, organizations often resort to subjective performance pay. This may … towards specific tasks. We show that subjective performance pay based on evaluation by a biased supervisor has the same … distorting effect on the agent's effort allocation as incentive pay based on an incongruent performance measure. If the principal …

This paper analyzes empirically the relationship between pay and performance. Economic and psychological theories … predict that the design and implementation of a performance measurement and compensation system affect the motivation of …

This paper examines the effect of incentives on the performance of darts players. We analyze four data sets comprising … natural research setting, because performance can be observed at the individual level and without the obscuring effects of … higher incentives, but choke when the incentives are really high. Professional players similarly display better performance …

performance pay. Employees in the randomly selected treatment stores could win a bonus by outperforming three comparable stores … from the control group over the course of four weeks. Treatment stores received weekly feedback on relative performance …. Control stores were kept unaware of their involvement, so that their performance generates exogenous variation in the relative …