The Importance of Task Complexity When Rewarding Nonfinancial Performance

2018 ◽  
Vol 31 (2) ◽  
pp. 1-17
Author(s):  
Leslie Berger
Keyword(s):  
Task Complexity ◽  
Important Task ◽  
Complex Task ◽  
Incentive Contract ◽  
Financial Measures ◽  
Nonfinancial Measures ◽  
Nonfinancial Performance ◽  
Task Characteristic ◽  
Measures Of Performance

ABSTRACT In this study, I investigate whether the effectiveness of rewarding performance of nonfinancial measures varies across levels of task complexity. I use a multi-period experiment where participants are assigned a highly or moderately complex task and an incentive contract where only financial measures or both financial and nonfinancial measures are rewarded. I find that in a moderately complex task, individuals perform better when only the financial measures are rewarded in the incentive contract. However, in a highly complex task, individuals perform better when both financial and nonfinancial measures are rewarded. Collectively, the results identify task complexity as an important task characteristic that impacts the effectiveness of incentives on nonfinancial measures of performance.

On the Association between Current Period Budget Target Achievability and the Properties of Nonfinancial Measures

2016 ◽  
Vol 29 (2) ◽  
pp. 47-62 ◽  
Author(s):  
Jizhang Huang ◽  
Ramji Balakrishnan ◽  
Fei Pan
Keyword(s):  
Performance Metrics ◽  
Incentive Payment ◽  
Positive Interaction ◽  
Financial Measures ◽  
Current Period ◽  
Nonfinancial Measures ◽  
Nonfinancial Performance ◽  
Incentive Contracting ◽  
Future Outcomes

ABSTRACT Firms usually employ nonfinancial performance metrics (NFPMs) to measure progress toward long-term outcomes. They also often evaluate current performance by comparing outcomes on financial measures with budgeted targets. Thus, they can motivate actions that sacrifice current profit for favorable future outcomes directly by increasing the rewards for such actions and indirectly by reducing their opportunity cost. Combining these arguments, we examine the relation between the properties (congruity and measurability) of NFPMs used in incentive contracting and the achievability of the current period budget target, where achievability is the probability of obtaining the incentive payment tied to current period performance. Survey data from 179 divisions in Chinese firms support our prediction of a positive (negative) association between the congruity (measurability) of NFPMs and budget achievability. We also document an expected positive interaction effect between congruity and measurability.

The Effect of Positive and Negative Financial and Nonfinancial Performance Measures on Analysts' Recommendations

2012 ◽  
Vol 24 (2) ◽  
pp. 47-64 ◽  
Author(s):  
Dipankar Ghosh ◽  
Anne Wu
Keyword(s):  
Financial Performance ◽  
Performance Measures ◽  
Differential Effect ◽  
Financial Analysts ◽  
Data Availability ◽  
Financial Measures ◽  
Nonfinancial Measures ◽  
Nonfinancial Performance ◽  
Nonfinancial Performance Measures ◽  
Number Of Firms

ABSTRACT This research experimentally examines the favorable/unfavorable outcomes of a firm's financial and nonfinancial performance measures on financial analysts' recommendation to divest or invest in a firm. The participants were financial analysts who made recommendations ranging from “definitely sell” to “hold” to “definitely buy.” The results show that financial and nonfinancial performance measures and their favorableness have an interactive impact on analysts' recommendations. To be precise, the recommendations were very close to the “definitely sell” anchor when the performance was unfavorable, irrespective of whether the measures presented were financial or nonfinancial. Further, favorableness of performance on nonfinancial measures appears to be irrelevant when performance on financial measures is unfavorable. However, when performance on financial measures is favorable, the effect of nonfinancial performance had a differential effect on analysts' recommendations depending on whether these measures indicated favorable or unfavorable performance. Specifically, when nonfinancial performance was unfavorable, the recommendations were closer to “hold” on average, but the recommendations were closer to “definitely buy” on average when nonfinancial performance was favorable. These results are consistent with our expectations. Overall, given that more and more firms are disclosing nonfinancial measures along with the traditional financial measures, and with an increasing number of firms reporting unfavorable financial performance, the results of this research underline the importance of considering both financial and nonfinancial measures and their outcomes—favorable and unfavorable—on analysts' recommendations. Data Availability: Please contact the authors.

Behavioral Effects of Nonfinancial Performance Measures: The Role of Procedural Fairness

2008 ◽  
Vol 20 (2) ◽  
pp. 55-71 ◽  
Author(s):  
Chong M. Lau ◽  
Antony Moser
Keyword(s):  
Performance Measures ◽  
Evaluation Criteria ◽  
Performance Criteria ◽  
Financial Measures ◽  
The United Kingdom ◽  
Nonfinancial Measures ◽  
Nonfinancial Performance ◽  
Employee Behaviors ◽  
Nonfinancial Performance Measures

Recent suggestions that nonfinancial measures are essential to overcome the inadequacies of traditional financial measures have led to the widespread adoption of such measures. It is, however, unclear how employees react to these new measures. This study hypothesizes that favorable employee behaviors will only occur if employees perceive performance evaluation criteria as fair. It is therefore important to ascertain if the use of nonfinancial measures as performance criteria is procedurally fair. Based on a sample of 149 managers from the United Kingdom, the results indicate that the use of nonfinancial performance measures was perceived as procedurally fair. We also find that such perceptions are associated with higher organizational commitment which, in turn, enhances employee job performance.

An Empirical Investigation of an Incentive Plan that Includes Nonfinancial Performance Measures

2000 ◽  
Vol 75 (1) ◽  
pp. 65-92 ◽  
Author(s):  
Rajiv D. Banker ◽  
Gordon Potter ◽  
Dhinu Srinivasan
Keyword(s):  
Customer Satisfaction ◽  
Financial Performance ◽  
Empirical Evidence ◽  
Performance Measures ◽  
Financial Measures ◽  
Nonfinancial Measures ◽  
Nonfinancial Performance ◽  
Incentive Plan ◽  
Nonfinancial Performance Measures

Recent studies report an increasing use of nonfinancial measures such as product quality, customer satisfaction, and market share in performance measurement and compensation systems. A growing literature suggests that because current nonfinancial measures are better predictors of long-term financial performance than current financial measures, they help refocus managers on the long-term aspects of their actions. However, little empirical evidence is available on the relation between nonfinancial measures and financial performance, and even less is known about performance impacts of incorporating nonfinancial measures in incentive contracts. Using time-series data for 72 months from 18 hotels managed by a hospitality firm, this study provides empirical evidence on the behavior of nonfinancial measures and their impact on firm performance. The results indicate that nonfinancial measures of customer satisfaction are significantly associated with future financial performance and contain additional information not reflected in the past financial measures. Furthermore, both nonfinancial and financial performance improve following the implementation of an incentive plan that includes nonfinancial performance measures.

Effects of task complexity on the learning of genre specific rhetorical moves and linguistic forms: the case of contrast and argumentative essays

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Maria Pia Gomez Laich ◽  
Naoko Taguchi
Keyword(s):  
English Learners ◽  
Task Complexity ◽  
Private University ◽  
Task Group ◽  
Second Phase ◽  
Complex Task ◽  
Simple Task ◽  
Undergraduate Level ◽  
Post Test ◽  
Argumentative Essays

Abstract This study investigates whether task complexity improves L2 English learners’ ability to write contrast and argumentative essays as measured by the use of rhetorical moves and linguistic forms characteristic of these essays. The participants were 62 students in an undergraduate-level composition class in a private university in the U.S. The study involved a first phase that targeted contrast writing and a second phase that targeted argumentative writing. In both phases, students were assigned randomly to a simple or complex task group and wrote an essay in dyads. In terms of rhetorical moves, the complex task group outperformed the simple task group in the immediate and delayed post-test of contrast essays. For argumentative essays, this superiority of the complex group was only found in the immediate post-test. As per linguistic forms, the complex task group outperformed the simple task group in the immediate and delayed post-test of both contrast and argumentative essays.

Research Note: The Interactions Among Stress, Vigilance, and Task Complexity

1975 ◽  
Vol 17 (1) ◽  
pp. 106-109 ◽  
Author(s):  
Robert S. Kennedy ◽  
Xenia B. Coulter
Keyword(s):  
Task Complexity ◽  
Vigilance Task ◽  
Research Note ◽  
Stressed Condition ◽  
Complex Task ◽  
Large Group ◽  
Flight Students ◽  
Better Than ◽  
Threat Of Shock ◽  
And Task

A simple (one-channel) or a complex (three-channel) vigilance task was administered with or without threat of shock to a large group of flight students. It was found that a larger absolute decrement was obtained in the complex task, but the relative decrements were equivalent for both. One-channel monitoring was better overall than three-channel monitoring in the non-stressed condition. Stressed subjects performed better than nonstressed, and this enhancement was greater for three-channel monitoring.

scholarly journals The Moderating Effect of Procedural Justice on the Effectiveness of the Balanced Scorecard in Improving Managerial Performance through Organizational Commitment

2010 ◽  
Vol 12 (3) ◽  
pp. 415
Author(s):  
Supriyadi Supriyadi
Keyword(s):  
Organizational Commitment ◽  
Procedural Justice ◽  
Balanced Scorecard ◽  
Moderating Effect ◽  
Managerial Performance ◽  
Financial Measures ◽  
The Balanced Scorecard ◽  
Nonfinancial Measures ◽  
The Impact ◽  
The Relationship

This study extends prior studies on the effectiveness of theBalanced Scorecard (BSC) to improve managerial performancedone by Lau and Mosser (2008) and Lau and Sholihin (2005).Specifically, the study empirically tests the moderating effects ofprocedural justice on the relationship between the financial andnonfinancial dimensions of BSC and managerial performance. Italso tests the impact of organizational commitment on performance.Based on survey data from 76 respondents, the results indicate thatperceived procedural justice in the use financial and nonfinancialdimensions of the BSC is associated with managers’ organizationalcommitment. It further finds that organizational commitment ispositively related to performance. The study extends the literatureby providing empirical evidence about the moderating effect ofprocedural justice on the relationship between the financial andnonfinancial dimensions of BSC and organizational commitment.Keywords: balanced scorecard; organizational commitment; financial measures;managerial performance; moderating effect; nonfinancial measures;procedural justice

scholarly journals Executive board members’ remuneration: A longitudinal study

2009 ◽  
Vol 6 (3) ◽  
pp. 97-103 ◽  
Author(s):  
Themistokles Lazarides ◽  
Evaggelos Drimpetas ◽  
Dimitrios N. Koufopoulos
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Board Members ◽  
Anglo Saxon ◽  
Executive Board ◽  
Financial Measures ◽  
Corporate Governance Mechanisms ◽  
Governance Quality ◽  
Corporate Governance Quality ◽  
Measures Of Performance

Remuneration is considered to be closely connected with financial performance (positively), firm size (positively), the organizational structure (negatively) and corporate governance mechanisms (negatively). Furthermore, a connection of ownership structure and executives’ remuneration has been well established (theoretically and empirically) in the literature (agency theory). The paper examines if these relationships are valid in Greece. Greece hasn’t the characteristics of an Anglo-Saxon country. Overall the study has shown that remuneration levels in Greece are defined by a different set of factors than the ones that are prominent in an Aglo-Saxon country. Notably, fundamental financial measures of performance are more widely used. The age of firms and corporate governance quality have a catalytic impact on remuneration levels.

TASK COMPLEXITY, LANGUAGE-RELATED EPISODES, AND PRODUCTION OF L2 SPANISH VOWELS

2016 ◽  
Vol 39 (2) ◽  
pp. 347-380 ◽  
Author(s):  
Megan Solon ◽  
Avizia Y. Long ◽  
Laura Gurzynski-Weiss
Keyword(s):  
Statistical Difference ◽  
Task Complexity ◽  
Task Completion ◽  
Complex Task ◽  
Vowel Production ◽  
Complex Tasks ◽  
Information Gap ◽  
Theoretical Predictions ◽  
L2 Spanish ◽  
L2 Pronunciation

This study tests the theoretical predictions regarding effects of increasing task complexity (Robinson, 2001a, 2001b, 2007, 2010; Robinson & Gilabert, 2007) for second language (L2) pronunciation. Specifically, we examine whether more complex tasks (a) lead to greater incidence of pronunciation-focused language-related episodes (LREs) and (b) positively impact accuracy of phonetic form during task completion. Seventeen dyads of intermediate L2 Spanish learners completed simple (+few elements) and complex (-few elements) information-gap map tasks in which the pronunciation of Spanish vowels was made task essential through the inclusion of minimal pair street names (e.g.,Calle Copa“Copa Street” andCalle Capa“Capa Street”). Results revealed no statistical difference in learner-produced pronunciation-related LREs in the simple and complex tasks. Vowel production, however, moved in a targetlike direction for one of five segments (/e/) during the complex task. Results therefore point to some benefits of task complexity manipulations for L2 pronunciation.

Virtual Team Effectiveness And Sequence Of Conditions

2012 ◽  
Vol 17 (1) ◽  
pp. 1 ◽  
Author(s):  
Joel Olson ◽  
Linda Olson
Keyword(s):  
Virtual Teams ◽  
Task Complexity ◽  
Complex Task ◽  
Group Effectiveness ◽  
Simple Task ◽  
Communication Medium ◽  
Face To Face ◽  
Computer Mediated ◽  
Full Rotation ◽  
Task Technology Fit

This study examines the sequence of Group Task Pressure (GTP) and communication medium conditions on group effectiveness. It contributes to the task-technology fit research by considering the sequence of these conditions on task-technology fit related to group effectiveness. The study has value for professionals pursuing the construction and management of virtual teams. A pilot experiment was conducted using 22 subjects in eight groups with a mixed 2x2 design. Given the sample size, the study is more descriptive than inferential. The study manipulated GTP by combinations of time scarcity, reward and task complexity. The media conditions used in the study were face-to-face and synchronous computer-mediated chats. Group effectiveness was measured by the length of time groups took to complete assigned tasks. The four study conditions were: a simple task completed face-to-face, a simple task completed in a computer-mediated condition, a complex task completed in a face-to-face condition and a complex task in a computer-mediated condition. Each group was rotated through all the conditions. The sequence of communication medium conditions were significant, but not the sequence of GTP conditions. Groups starting in the face-to-face condition took less time to complete their rotation of tasks than groups starting in the computer-mediated condition. Groups starting in both the low and high GTP conditions took the same amount of time to complete the full rotation of task and conditions. Recommendations for subsequent research on group task pressure are presented.

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