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Selected Works

2016

Incentive compensation

Articles 1 - 3 of 3

Full-Text Articles in Business

A Field Study Of The Impact Of A Performance-Based Incentive Plan, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter Oct 2016

A Field Study Of The Impact Of A Performance-Based Incentive Plan, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter

Gordon Potter

Much management accounting research focuses on design of incentive compensation contracts. A basic assumption in these contracts is that performance-based incentives improve employee performance. This paper reports on a field test of the multi-period incentive effects of a performance-based compensation plan on the sales of a retail establishment. Analysis of panel data for 15 retail outlets over 66 months indicates a sales increase when the plan is implemented, an effect that persists and increases over time. Sales gains are significantly lower in the peak selling season when more temporary workers are employed.


Audit Committee Incentive Compensation And Accounting Restatements, Deborah Archambeault, F. Todd Dezoort, Dana Hermanson Mar 2016

Audit Committee Incentive Compensation And Accounting Restatements, Deborah Archambeault, F. Todd Dezoort, Dana Hermanson

Deborah Archambeault

This study investigates whether incentive-based compensation for audit committee members is associated with accounting restatements. We use an agency framework to predict that short-term (long-term) incentive compensation for audit committee members will increase (decrease) the likelihood of accounting restatements due to error or fraud. Using a matched-sample logistic regression with 153 restatement and 153 nonrestatement companies, we find the predicted positive relation between short-term incentive compensation (short-term stock option grants) for audit committee members and likelihood of restatement. However, the long-term incentive compensation results contradict prediction and indicate a significant positive relation between audit committee member long-term incentive compensation {long-term …


An Empirical Examination Of The Impacts From Termination Of A Performance-Based Incentive Plan, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter, Dhinu Srinivasan Jan 2016

An Empirical Examination Of The Impacts From Termination Of A Performance-Based Incentive Plan, Rajiv D. Banker, Seok-Young Lee, Gordon S. Potter, Dhinu Srinivasan

Gordon Potter

This paper reports on the financial impacts from the termination of a pay for performance plan for the salesforce at a retail establishment. Using monthly panel data spanning more than eight years for 15 outlets of a major retailer, this study documents that store-level sales and operating profits decrease after the incentive plan is terminated. Individual performance data are then investigated to help identify the role of effort and selection effects in explaining the documented decrease. The analysis of the individual employee sales data reveals that virtually all of the declining store level sales can be explained by selection effects.