Using an experiment in which participants design rebus puzzles, we extend recent research on creativity-weighted productivity (i.e., quantity weighted by creativity ratings) by allowing participants to choose between a contract that rewards creativity-weighted productivity or one that rewards...

A case study of the implementation of the balanced scorecard in a large local government authority is reported. Based on interview data, the factors that were perceived by senior managers to be important to the success or failure of the implementation are analysed. It is determined that...

Using car dealership data, we examine the relevance of forward-looking (FL) and contemporaneous (CO) measures for pay-for-performance incentives (bonus, annual raise, promotions) for long-horizon employees. Economic models suggest that while contracts with FL performance measures mitigates the...

The balanced scorecard has been hailed as one of the major developments in management accounting in the last decade. Lipe and Salterio (2000) show that one of the key features of this development, the inclusion of measures that are unique to the strategic objectives of a business unit, tend to...

Business executives and academics frequently criticize budget-based compensation plans as providing incentives for subordinates to build slack into proposed budgets. In this paper, we examine whether either of two practices - using budgets to allocate scarce resources, or providing information...

There has been increasing interest in firms in which workers strongly identify with their firm's success. It would seem apparent that such identification by workers should be considered as an integral element of the firm's control systems. However, much of the literature on the myriad forms of...

In this paper, we investigate whether budgets ratchet. Using business-unit data from a large multinational corporation, we find evidence consistent with ratcheting where favorable budget variances result in performance budget increases that are larger than decreases associated with unfavorable...

I study the consequences of a random exposure to common risk for the purpose of relative performance evaluation (RPE) and find that it significantly affects the usefulness and the empirical measurement of RPE. According to my analysis, the magnitude of the exposure risk not only determines how...

This study explores the impacts of incentive contracts on the creative process and the resulting creativity of a design job. Using an eye-tracking device to track the designers' eye movements during an artwork design task, we found that designers working under a piece-rate plus competitive bonus...

In the empirical estimation of the relation between CEO pay and both firm and peer performance, researchers typically include conventional accounting-based measures that reflect firm performance net of executive pay expense. We analytically show that when firms evaluate CEO performance relative...