Effects of a Tournament Incentive Plan Incorporating Managerial Discretion in a Geographically Dispersed Organization

Autor:	Carolyn Deller, Tatiana Sandino
Rok vydání:	2020
Předmět:	Strategy and Management media_common.quotation_subject Equity theory Management Science and Operations Research Discretion Microeconomics Geographical distance Incomplete contracts Incentive program Tournament Business Location Selection (genetic algorithm) media_common
Zdroj:	Management Science. 66:911-931
ISSN:	1526-5501 0025-1909
Popis:	Using retail chain data, we study the effects of a tournament incentive plan based primarily on objective performance, but incorporating managerial discretion in the selection of winners. In principle, such plans could motivate employees to perform both at a high level, based on objective criteria, and in accordance with company values, considered via managerial discretion. However, such plans could be counterproductive if enough participants (especially those who do not win) perceive that subjectivity (introduced via discretion) adds unfairness. We show that, on average, the tournament incentive plan was associated with improved store sales. We also find that such plans can be more beneficial for geographically distant participants, where the potential for improving alignment is greater. Lastly, we find some evidence that participants’ resource constraints (potentially affecting unfairness concerns) can impact outcomes under the plan. This paper was accepted by Shiva Rajgopal, accounting.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::a467b0d116856fac85d7dff463ac0da8 https://doi.org/10.1287/mnsc.2018.3214 Zobrazit plný text záznamu