Despite the importance of target setting for firms, prior research offers mixed evidence regarding performance consequences of target difficulty levels. While experimental research suggests that setting difficult targets can increase performance, empirical evidence in field studies is mixed and...

Despite the importance of target setting for firms, prior research offers mixed evidence regarding performance consequences of target difficulty levels. While experimental research suggests that setting difficult targets can increase performance, empirical evidence in field studies is mixed and...

This study investigates how performance-to-target (exceeding vs. missing prior target) and task type (ability-driven vs. effort-driven) affect manager's target setting decisions in a setting in which a manager sets targets for multiple employees. We predict that target adjustments are greater...

This study investigates via an experiment the effects of target transparency on managers' target setting decisions. Specifically, we investigate whether target transparency, which reflects employees' knowledge about each other's targets, affects managers' target setting decisions and whether...

Budgeting has different functions in the firm that are not necessarily congruent with each other but conflict. In many firms, budgets are simultaneously used for both operative planning and performance evaluation. Although prior literature recommends using different budget levels for different...

We investigate whether and under which conditions top management uses or commits to not use new information when deciding about intra-year bonus target revisions, and how this use or non-use of information varies contingent on firms’ organizational design. First, we analyze whether firms’...

This study investigates when and why intra-year bonus target revisions occur. This is important as intra-year target revisions occur regularly in practice but are not well understood. Specifically, we analyze two potential drivers of intra-year bonus target revisions: reduced managerial...