Accounting Papers

Document Type

Journal Article

Date of this Version

4-2002

Publication Source

Journal of Labor Economics

Volume

20

Issue

S2

Start Page

S58

Last Page

S90

DOI

10.1086/338674

Abstract

This study examines the determinants of performance measure choices in worker incentive plans. The results indicate that inform- ativeness issues such as those addressed in economic theories have a significant effect on measurement choices. However, other reasons for adopting the plans, such as upgrading the workforce and linking bonuses to the firm’s ability to pay, also influence measurement choices, as do union representation and management participation in plan design. Moreover, the factors influencing the use of specific measures vary, suggesting that the aggregate performance measure classifications commonly used in compensation research provide somewhat misleading inferences regarding performance measurement choices.

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Date Posted: 27 November 2017