THE MEASUREMENT GAP IN PAYING FOR PERFORMANCE: ACTUAL AND PREFERRED MEASURES

Advances in Management Accounting

ISBN: 978-0-76231-118-7, eISBN: 978-1-84950-281-8

ISSN: 1474-7871

Publication date: 21 July 2004

Abstract

What is measured gets managed – especially if rewards depend on it. For this reason many companies (over 70% in this survey) have upgraded their performance measurement systems so as to include a mix of financial and non-financial metrics. This study compares how companies currently measure performance for compensation purposes with how their managers think performance should be measured. We find significant measurement gaps between actual and preferred measures, and we find that larger measurement gaps are related to lower overall performance. The choice of performance measures for compensation purposes is also related to the attitudes of managers towards manipulation of reported results.

Citation

Shields, J.F. and Ferreira White, L. (2004), "THE MEASUREMENT GAP IN PAYING FOR PERFORMANCE: ACTUAL AND PREFERRED MEASURES", Advances in Management Accounting (Advances in Management Accounting, Vol. 12), Emerald Group Publishing Limited, Bingley, pp. 59-83. https://doi.org/10.1016/S1474-7871(04)12003-0

Publisher

:

Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited

To read the full version of this content please select one of the options below

You may be able to access this content by logging in via Shibboleth, Open Athens or with your Emerald account.
If you think you should have access to this content, click the button to contact our support team.