Abstract
The objective of this study is to examine the effects of control system characteristics and perceived environmental uncertainty on the relative use of performance-contingent compensation. The results, based on a survey of division managers, indicate that monitoring ability is negatively associated with the use of performance-contingent compensation. In addition, monitoring is found to moderate the relationship between uncertainty and compensation system design. Whereas in non-monitoring firms, higher levels of uncertainty are associated with increased use of performance-contingent compensation, in monitoring firms, higher levels of uncertainty are associated with decreased use of performance-contingent compensation. These results support agency theory arguments that compensation structure is determined at least in part by concerns for economic efficiency.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 159-167 |
| Number of pages | 9 |
| Journal | Accounting and Business Research |
| Volume | 23 |
| Issue number | 90 |
| DOIs | |
| State | Published - Jan 1 1993 |
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ASJC Scopus subject areas
- Accounting
Cite this
The Effect of Behaviour Monitoring and Uncertainty on the Use of Performance-Contingent Compensation. / Kren, Leslie; Kerr, Jeffrey.
In: Accounting and Business Research, Vol. 23, No. 90, 01.01.1993, p. 159-167.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - The Effect of Behaviour Monitoring and Uncertainty on the Use of Performance-Contingent Compensation
AU - Kren, Leslie
AU - Kerr, Jeffrey
PY - 1993/1/1
Y1 - 1993/1/1
N2 - The objective of this study is to examine the effects of control system characteristics and perceived environmental uncertainty on the relative use of performance-contingent compensation. The results, based on a survey of division managers, indicate that monitoring ability is negatively associated with the use of performance-contingent compensation. In addition, monitoring is found to moderate the relationship between uncertainty and compensation system design. Whereas in non-monitoring firms, higher levels of uncertainty are associated with increased use of performance-contingent compensation, in monitoring firms, higher levels of uncertainty are associated with decreased use of performance-contingent compensation. These results support agency theory arguments that compensation structure is determined at least in part by concerns for economic efficiency.
AB - The objective of this study is to examine the effects of control system characteristics and perceived environmental uncertainty on the relative use of performance-contingent compensation. The results, based on a survey of division managers, indicate that monitoring ability is negatively associated with the use of performance-contingent compensation. In addition, monitoring is found to moderate the relationship between uncertainty and compensation system design. Whereas in non-monitoring firms, higher levels of uncertainty are associated with increased use of performance-contingent compensation, in monitoring firms, higher levels of uncertainty are associated with decreased use of performance-contingent compensation. These results support agency theory arguments that compensation structure is determined at least in part by concerns for economic efficiency.
UR - http://www.scopus.com/inward/record.url?scp=84963462896&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84963462896&partnerID=8YFLogxK
U2 - 10.1080/00014788.1993.9729873
DO - 10.1080/00014788.1993.9729873
M3 - Article
AN - SCOPUS:84963462896
VL - 23
SP - 159
EP - 167
JO - Accounting and Business Research
JF - Accounting and Business Research
SN - 0001-4788
IS - 90
ER -