scholarly journals Do White-Collar Employee Incentives Improve Firm Profitability?

2017 ◽  
Vol 30 (3) ◽  
pp. 95-115 ◽  
Author(s):  
Seppo Ikäheimo ◽  
Juha-Pekka Kallunki ◽  
Sinikka Moilanen ◽  
Eduardo Schiehll
Keyword(s):  
Financial Incentives ◽  
Task Complexity ◽  
White Collar ◽  
Return On Equity ◽  
White Collar Employee ◽  
The Future ◽  
Performance Effects ◽  
Employee Incentives ◽  
Future Return ◽  
And Performance

ABSTRACT We use proprietary archival compensation panel data from Finnish white-collar employees (WCEs) over the period of 2002 to 2011 in order to examine the relationship between performance-based incentives for WCEs and the future profitability of the firm as well as to determine whether this association is moderated by task complexity. While many studies examine the determinants and performance effects of CEO compensation, virtually no evidence has been presented to indicate that explicit financial incentives for WCEs improve the profitability of the firm. Our empirical results show that performance-based incentives for WCEs are significantly positively related to the future return-on-assets, return-on-equity, and profit margin ratios of the firm. We also find that this effect comes from the performance-based incentives for low-level WCEs, corroborating the importance of implementing performance-based incentives also to low-task complexity jobs. JEL Classifications: M40.

The Determinants and Performance Effects of Managers' Performance Evaluation Biases

2011 ◽  
Vol 86 (5) ◽  
pp. 1549-1575 ◽  
Author(s):  
Jasmijn C Bol
Keyword(s):  
Performance Evaluation ◽  
Employee Motivation ◽  
Data Availability ◽  
Perceived Fairness ◽  
Future Performance ◽  
Confidentiality Agreement ◽  
Leniency Bias ◽  
Performance Effects ◽  
Employee Incentives ◽  
And Performance

ABSTRACT This study examines the determinants and performance effects of centrality bias and leniency bias. The results show that managers respond to their own incentives and preferences when subjectively evaluating performance. Specifically, information-gathering costs and strong employee-manager relationships positively affect centrality bias and leniency bias. The findings also indicate that performance evaluation biases affect not only current performance ratings, but also future employee incentives. Inconsistent with predictions based on the agency perspective, the results show that managers' performance evaluation biases are not necessarily detrimental to compensation contracting. Although centrality bias negatively affects performance improvement, the evidence does not reveal a significant negative relation between leniency bias and performance. Rather, leniency bias is positively associated with future performance, which is consistent with the behavioral argument that bias can improve perceived fairness and, in turn, employee motivation. Data Availability: Data used in this study cannot be made public due to a confidentiality agreement with the participating firm.

The Relation Between Financial Incentives, Motivation, and Performance

2017 ◽  
Vol 16 (2) ◽  
pp. 61-76 ◽  
Author(s):  
Anaïs Thibault Landry ◽  
Marylène Gagné ◽  
Jacques Forest ◽  
Sylvie Guerrero ◽  
Michel Séguin ◽  
...  
Keyword(s):  
Financial Incentives ◽  
Work Performance ◽  
Autonomous Motivation ◽  
Compensation Plans ◽  
Work Settings ◽  
Path Analyses ◽  
Three Samples ◽  
And Performance ◽  
Performance Results

Abstract. To this day, researchers are debating the adequacy of using financial incentives to bolster performance in work settings. Our goal was to contribute to current understanding by considering the moderating role of distributive justice in the relation between financial incentives, motivation, and performance. Based on self-determination theory, we hypothesized that when bonuses are fairly distributed, using financial incentives makes employees feel more competent and autonomous, which in turn fosters greater autonomous motivation and lower controlled motivation, and better work performance. Results from path analyses in three samples supported our hypotheses, suggesting that the effect of financial incentives is contextual, and that compensation plans using financial incentives and bonuses can be effective when properly managed.

Team Learning Behaviors and Performance: A Meta-Analysis of Direct Effects and Moderators

2021 ◽  
pp. 105960112110169
Author(s):  
Christopher W. Wiese ◽  
C. Shawn Burke ◽  
Yichen Tang ◽  
Claudia Hernandez ◽  
Ryan Howell
Keyword(s):  
Team Performance ◽  
Team Learning ◽  
Task Complexity ◽  
Meta Analysis ◽  
Sample Type ◽  
Learning Behaviors ◽  
Learning Teams ◽  
And Performance ◽  
The Relationship ◽  
Team Familiarity

Under what conditions do team learning behaviors best predict team performance? The current meta-analytic efforts synthesize results from 113 effect sizes and 7758 teams to investigate how different conceptualizations (fundamental, intrateam, and interteam), team characteristics (team size and team familiarity), task characteristics (interdependence, complexity, and type), and methodological characteristics (students vs. nonstudents and measurement choice) affect the relationship between team learning behaviors and team performance. Our results suggest that while different conceptualizations of team learning behaviors independently predict performance, only intrateam learning behaviors uniquely predict performance. A more in-depth investigation into the moderating conditions contradicts the familiar adage of “it depends.” The strength of the relationship between intrateam learning behaviors and team performance did not depend on team familiarity, task complexity, or sample type. However, our results suggested this relationship was stronger in larger teams, teams with moderate task interdependence, teams performing project/action tasks, and studies that use measures that capture a wider breadth of the team learning behavior construct space. These efforts suggest that common boundary conditions do not moderate this relationship. Scholars can leverage these results to develop more comprehensive theories addressing the different conceptualizations of team learning behaviors as well as providing clarity on the scenarios where team learning behaviors are most needed. Further, practitioners can use our results to develop more guided team-based policies that can overcome some of the challenges of forming and developing learning teams.

Does corporate governance affect the performance of Islamic banks? New insight into Islamic countries

2020 ◽  
Vol 20 (6) ◽  
pp. 1073-1090 ◽  
Author(s):  
Ejaz Aslam ◽  
Razali Haron
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Positive Impact ◽  
Islamic Banks ◽  
Governance Mechanism ◽  
Method Of Moment ◽  
Content Type ◽  
Return On Equity ◽  
Islamic Countries ◽  
And Performance

Purpose Corporate governance plays a significant role to overcome agency issues and develop the culture of transparency and openness. In this context, this paper aims to examine how corporate governance mechanisms affect the performance of Islamic banks (IBs). Design/methodology/approach Stepwise, two-step system generalize method of moment estimation technique is used in the analysis in which control variables are added into the model sequentially. This study used data on 129 IBs from 29 Islamic countries (Middle East, South Asia and Southeast Asia) during the period of 2008 to 2017. Findings The findings suggest that the audit committee (AUDC) and Shariah board (SB) have positive impact on the performance of IBs (return on assets and return on equity). However, board size and risk management committee have negative and significant effect on the performance of IBs. CEO duality and non-executive directors have mixed relationship with the performance of IBs. These results support the argument that IBs need to improve their financial performance through appropriate governance mechanism. Research limitations/implications The findings of the study added a new dimension to the governance research that could be a valuable source of knowledge for policymakers and regulators to improve the existing governance mechanism for better performance of IBs. Originality/value The study fills the gap in the literature by addressing the issue of corporate governance on performance of IBs across countries. Agency theory is discussed to explain the relationship between corporate governance mechanism and performance.

How do resources and diversification strategy explain the performance consequences of internationalization?

2014 ◽  
Vol 52 (5) ◽  
pp. 897-915 ◽  
Author(s):  
Yan Chen ◽  
Yiwei Jiang ◽  
Chengqi Wang ◽  
Wen Chung Hsu
Keyword(s):  
Emerging Market ◽  
Product Diversification ◽  
Firm Resources ◽  
Diversification Strategy ◽  
Data Set ◽  
Content Type ◽  
Listed Firms ◽  
Performance Consequences ◽  
Performance Effects ◽  
And Performance

Purpose – The purpose of this paper is to examine how firm resources and diversification strategy explain the performance consequences of internationalization of emerging market enterprises. Design/methodology/approach – The paper conducts a regression analysis by using a novel panel data set comprising of 685 listed Chinese firms over the period of 2008-2011. Findings – The results show that the relationship between internationalization and performance is inverse U-shaped. Further, marketing resources play a greater role in enhancing the performance effects of internationalization than technological resources do. Related product diversification enhances the performance effects, while unrelated product diversification does the contrary. Research limitations/implications – The study focusses on listed firms in one country, and as a result, the findings cannot be generalized to non-listed firms and firms in other countries. Practical implications – This paper offers guidelines for international managers to improve performance of internationalization by developing a particular type of resources and diversification strategy. Originality/value – This paper extends the literature on the functional form of the internationalization-performance relationship, and further suggests that the analysis of the performance consequences of internationalization should go beyond the nexus between internationalization and performance, and focusses on firm-specific resources and strategies that may facilitate or constrain the performance effects of internationalization.

A Driving Simulator Study of the Performance Effects of Low Blood Alcohol Concentration

1996 ◽  
Vol 40 (18) ◽  
pp. 943-946 ◽  
Author(s):  
R. Wade Allen ◽  
Zareh Parseghian ◽  
Anthony C. Stein
Keyword(s):  
Divided Attention ◽  
Driving Simulator ◽  
Blood Alcohol Concentration ◽  
Large Body ◽  
Alcohol Concentration ◽  
Blood Alcohol ◽  
Performance Effects ◽  
Driving Task ◽  
Simulator Study ◽  
And Performance

There is a large body of research that documents the impairing effect of alcohol on driving behavior and performance. Some of the most significant alcohol influence seems to occur in divided attention situations when the driver must simultaneously attend to several aspects of the driving task. This paper describes a driving simulator study of the effect of a low alcohol dose, .055 BAC (blood alcohol concentration %/wt), on divided attention performance. The simulation was mechanized on a PC and presented visual and auditory feedback in a truck cab surround. Subjects were required to control speed and steering on a rural two lane road while attending to a peripheral secondary task. The subject population was composed of 33 heavy equipment operators who were tested during both placebo and drinking sessions. Multivariate Analysis of Variance showed a significant and practical alcohol effect on a range of variables in the divided attention driving task.

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