TY - JOUR
T1 - The Effect of Behaviour Monitoring and Uncertainty on the Use of Performance-Contingent Compensation
AU - Kren, Leslie
AU - Kerr, Jeffrey L.
PY - 1993/3
Y1 - 1993/3
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.
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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 -