Performance Measure Properties and Incentive System Design
July 31, 2007
Michael Gibbs (University of Chicago), Kenneth A. Merchant (USC), Wim A. Van Der Stede (London School of Economics), and Mark E. Vargas (University of Texas) analyze effects of performance measure properties (controllable and uncontrollable risk, distortion, and manipulation) on incentive plan design, using data from auto dealership manager incentive systems