Dividing the Pie: The Influence of Managerial Discretion Extent on Bonus Pool Allocation*
2011; Wiley; Volume: 28; Issue: 5 Linguagem: Inglês
10.1111/j.1911-3846.2011.01073.x
ISSN1911-3846
AutoresWendy J. Bailey, Gary Hecht, Kristy L. Towry,
Tópico(s)Corporate Finance and Governance
ResumoContemporary Accounting ResearchVolume 28, Issue 5 p. 1562-1584 Dividing the Pie: The Influence of Managerial Discretion Extent on Bonus Pool Allocation* WENDY J. BAILEY, WENDY J. BAILEY Northeastern UniversitySearch for more papers by this authorGARY HECHT, GARY HECHT University of Wisconsin-MadisonSearch for more papers by this authorKRISTY L. TOWRY, KRISTY L. TOWRY Emory UniversitySearch for more papers by this author WENDY J. BAILEY, WENDY J. BAILEY Northeastern UniversitySearch for more papers by this authorGARY HECHT, GARY HECHT University of Wisconsin-MadisonSearch for more papers by this authorKRISTY L. TOWRY, KRISTY L. TOWRY Emory UniversitySearch for more papers by this author First published: 27 January 2011 https://doi.org/10.1111/j.1911-3846.2011.01073.xCitations: 53 † Accepted by Alan Webb. The authors appreciate the helpful comments and suggestions from Alan Webb (associate editor), two anonymous reviewers, as well as from Michael Bamber, Dennis Bline, Larry Brown, Alex Bruggen, Lynn Hannan, Joshua Herbold, Steve Kachelmeier, Lisa Koonce, Al Leitch, Molly Mercer, Bill Messier, Jan Mouritsen, Sean Peffer, Madhav Rajan, Steve Salterio, Regan Schmidt, Margaret Shackell-Dowell, Michael Shields, Bill Tayler, Yu Tian, Scott Vandervelde, Rich White, Wilda Womanac, and workshop participants at Queen’s University, University of Montana, University of Wisconsin-Madison, University of South Carolina, University of Texas at Austin, the Global Management Research Symposium, the Southeast Summer Accounting Research Conference, the American Accounting Association Management Accounting Section Conference, and the American Accounting Association Annual Meeting. We also thank Stephen Brown, Al Hartgraves, and Al Leitch for helping to recruit experiment participants and Kelvin Liu, Brad Matthews, Joanna Rolfes, Jane Thayer, and Jeff Smith for their help in coding and analyzing the data. Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onEmailFacebookTwitterLinkedInRedditWechat Supporting Information Data S1: Key to Experiment Materials. Filename Description CARE_1073_sm_datas1.pdf209.4 KB Supporting info item Please note: The publisher is not responsible for the content or functionality of any supporting information supplied by the authors. Any queries (other than missing content) should be directed to the corresponding author for the article. References Allen, B. R., E. R. Brownlee II, M. E. Haskins, and L. J. Lynch. 2005. Cases in management accounting and control systems, 4th ed. Upper Saddle River, NJ: Pearson Prentice Hall. Baiman, S., and M. V. Rajan. 1995. The informational advantages of discretionary bonus schemes. The Accounting Review 70 (4): 557–79. Baker, G., R. Gibbons, and K. J. Murphy. 1994. Subjective performance measures in optimal incentive contracts. The Quarterly Journal of Economics 109 (4): 1125–56. Banker, R. D., G. Potter, and D. Srinivasan. 2000. An empirical investigation of an incentive plan that includes nonfinancial performance measures. The Accounting Review 75 (1): 65–92. Bazerman, M. 1998. Judgment in managerial decision making. New York: Wiley. Bol, J. 2008. Subjectivity in compensation contracting. Journal of Accounting Literature 28 (1): 1–24. Bol, J., and S. D. Smith. 2010. Spillover effects in subjective performance evaluation: Bias, fairness, and controllability. Working paper, University of Illinois at Urbana-Champaign. Buckless, F. A., and S. P. Ravenscroft. 1990. A refinement of ANOVA in behavioral analysis. The Accounting Review 65 (4): 933–45. Chapman, G. B., and E. J. Johnson. 1999. Anchoring, activation, and the construction of values. Organizational Behavior and Human Decision Processes 79 (2): 115–53. Epley, N., and T. Gilovich. 2005. When effortful thinking influences judgmental anchoring: Differential effects of forewarning and incentives on self-generated and externally provided anchors. Journal of Behavioral Decision Making 18 (3): 199–212. Epley, N., and T. Gilovich. 2006. The anchoring-and-adjustment heuristic: Why adjustments are insufficient. Psychological Science 17 (4): 311–18. Fisher, J. G., L. A. Maines, S. A. Peffer, and G. Sprinkle. 2005. An experimental investigation of employer discretion in employee performance evaluation and compensation. The Accounting Review 80 (2): 563–83. Gibbs, M., K. A. Merchant, W. A. Van der Stede, and M. E. Vargus. 2004. Determinants and effects of subjectivity in incentives. The Accounting Review 79 (2): 409–36. Hastie, R., and R. M. Dawes. 2001. Rational choice in an uncertain world: The psychology of judgment and decision making. Thousand Oaks, CA: Sage. Hilton, R. W. 2008. Managerial accounting, 7th ed. New York: McGraw-Hill Irwin. Ittner, C. D., and D. F. Larcker. 1998. Innovations in performance measurement: Trends and research implications. Journal of Management Accounting Research 10: 205–38. Ittner, C. D., D. F. Larcker, and M. W. Meyer. 2003. Subjectivity and the weighting of performance measures: Evidence from a balanced scorecard. The Accounting Review 78 (3): 725–58. Kachelmeier, S. J., and K. L. Towry. 2002. Negotiated transfer pricing: Is fairness easier said than done? The Accounting Review 77 (3): 571–93. Kahneman, D., J. L. Knetsch, and R. H. Thaler. 1986. Fairness as a constraint on profit seeking: Entitlements in the market. American Economic Review 76 (4): 728–41. Libby, T., S. E. Salterio, and A. Webb. 2004. The balanced scorecard: The effects of assurance and process accountability on managerial judgment. The Accounting Review 79 (4): 1075–94. Luft, J., and R. Libby. 1997. Profit comparisons, market prices and managers’ judgments about negotiated transfer prices. The Accounting Review 72 (2): 217–29. Murphy, K. J., and P. Oyer. 2003. Discretion in executive incentive contracts. Working paper, University of Southern California. Prendergast, C. 1999. The provision of incentives in firms. Journal of Economic Literature 37 (1): 7–63. Rajan, M., and S. Reichelstein. 2006. Subjective performance indicators and discretionary bonus pools. Journal of Accounting Research 44 (3): 585–618. Rajan, M., and S. Reichelstein. 2009. Objective versus subjective performance indicators of managerial performance. The Accounting Review 84 (1): 209–37. Russo, J. E., and B. A. Dosher. 1983. Strategies for multiattribute binary choice. Journal of Experimental Psychology: Learning, Memory, and Cognition 9 (4): 676–96. Sprinkle, G. B. 2003. Perspectives on experimental research in managerial accounting. Accounting, Organizations and Society 28 (2–3): 287–313. Stokes, M., C. Davis, and G. Koch. 2000. Categorical data analysis using the SAS system. Cary, NC: SAS Institute. Tversky, A., and D. Kahneman. 1974. Judgment under uncertainty: Heuristics and biases. Science 185 (4157): 1124–30. Citing Literature Volume28, Issue5Winter 2011 (December)Pages 1562-1584 ReferencesRelatedInformation
Referência(s)