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This paper aims to interpret and compare managerial intentions for and employee perceptions of group-based incentive systems.

The data comprise interviews with managers and employees in four Finnish firms with experience of company-wide incentive systems involving profit-sharing and team-based rewards. Benefitting from social exchange theory, managers’ intentions and employees’ perceptions are examined.

Managers’ and employees’ views resemble each other concerning profit-sharing as reflecting reciprocity rooted in perceived distributive fairness, whereas examination of the team-based rewards revealed impediments in reciprocity. While managerial intentions for team-based rewards refer to social exchange with economic intensity via selection of controllable performance measurements aimed at making individual-level effort count, the employees’ perceptions deem such metrics non-controllable, reflecting perceived distributive and procedural unfairness.

Profit-sharing seems to create fair social obligation and goal congruence between managers and employees, whereas team-based incentives easily suffer from unfairness, reducing their effectiveness.

Distinguishing between managerial intentions and employee perceptions pertaining to incentive systems facilitated in-depth exploration of the social exchange inherent in them, conceptualized in terms of economic intensity, fairness and controllability. With this lens, qualitative analysis revealed differences in interpretations of controllability and fairness between the managerial intentions and employee perceptions. The central contribution to scholarship takes the form of interpretations reflecting upon these key findings.

The growing use of teams in the workplace has led to an increasing number of incentive systems designed to motivate team performance. The present paper reviews such incentive systems, including: team gainsharing/profit‐sharing incentive systems; team goal‐based incentive systems; team discretionary bonus systems; team skill incentive systems; team member skill incentive systems; team member goal‐based incentive systems; and team member merit incentive systems. Evidence regarding the effectiveness of each team incentive system is reviewed. Generally, two factors affect the usefulness of a given team incentive system: team interdependence (both within and between teams) and team type (i.e., full‐ or part‐time). Based upon these factors, guidelines for the implementation of each team incentive system are provided.

The purpose of this paper is to investigate and recommend formal guidelines for the initial design of country-level or sectoral payroll levy systems that are intended to incentivize new firm training. The paper presents and illustrates two necessary conditions for new training to be stimulated, one involving transaction costs and the other the incentive payback. Ultimately, the purpose is to guide more successful designs for such systems in future.

The paper is principally theoretical, but the South African levy-grant system of the late 1990s is used as a case study. The paper illustrates how World Bank data may have been used to guide the design.

The paper demonstrates how during the design phase, policy makers can employ knowledge of pre-incentive training levels of firms, and possibly also estimates of unit transaction costs, to estimate the number of employees that may be positively affected. In the South African case, the actual system used may have been underspecified and unlikely to reach many employees with new training.

Future research may employ these guidelines in empirical studies of the relative success of payroll levies.

The practical value of the paper is formal guidelines for policy makers seeking to implement such payroll levy systems.

Better design for these systems may have positive implications for productivity and social externalities while avoiding unnecessary waste.

While there have been several more general reflections of payroll levy systems, and empirical investigations of their efficacy, this is the first paper formally modeling and testing design guidelines that can be implemented practically in the pre-implementation phase.

It is widely agreed that employees’ attitudes towards pay incentives are an important determinant of their effectiveness. The perceived fairness of pay incentives and their determinants are examined. Based on theories dealing with the fairness evaluation of rewards, a number of hypotheses are formulated proposing that employees’ judgements of the fairness of pay incentives will be partly determined by their attitudes towards work and certain situational and personal background factors. The findings generally support these hypotheses. They indicate that the fairness judgements of pay incentive schemes and the considerations underlying such judgements are determined, among other things, by work motivation and by personal background characteristics such as age, education, number of dependants, organisational tenure and country of origin.

The purpose of this paper is to develop a framework for the application of evidence-based management to chronic disease healthcare.

Chronic healthcare is specially characterized by recursive patient-physician interactions in which evidence-based medicine (EBM) is applied. However, implementing evidence-based solutions to improve healthcare quality requires managers to effect changes in many different areas: organizational structure, procedures, technology and in physician/provider behaviors. To complicate matters further, they must achieve these changes using the tools of resource allocation or incentives. The literature contains many systematic reviews evaluating the question of physician and patient behavior under various types and structures of incentives. Similarly, systematic reviews have also been done regarding specific changes to the healthcare process and their effectiveness in improving patient outcomes. Yet, these reviews uniformly lament a lack of appropriate data from well-organized studies on the question of “Why?” solutions may work in one instance while not in another. The authors present a new theoretical framework that aids in answering this question.

This paper presents a new theoretical framework (Influence Model of Chronic Healthcare) that identifies: the critical areas in which managers can effect changes that improve patient outcomes; the influence these areas can have on each other, as well as on patient and physician behavior; and the mechanisms by which these influences are exerted. For each, the authors draw upon, and present the evidence in the literature. Ultimately, the authors recognize that this is a complex question that has not yet been fully researched. The contribution of this model is twofold: first, the authors hope to focus future research efforts, and second, provide a useful heuristic to managers who must make decisions with only the lesser-quality evidence the literature contains today.

This model can be used by managers as a heuristic either ex ante or ex post to determine the effectiveness of their decisions and strategies in improving healthcare quality. In addition, it can be used to analyze why actions or decisions taken achieved a given outcome, and how best to proceed to effect further improvements on patient outcomes. Last, the model serves to focus attention on specific questions for further research.

The purpose of this paper is to explore the effect of “usefulness” and “incentives” on the joint decision to share and use knowledge objects.

Using an experimental design, the authors explore the effects of different incentive systems, the effect of the usefulness of a knowledge management system on intent to contribute and intent to use knowledge, the effect of personal characteristics, specifically an individual's tolerance of ambiguity, and joint endogeneity of contribution and use along with potential complementarity of usefulness and incentives.

For ambiguity tolerant individuals, an incentive mechanism that rewards the contributor for shared knowledge used by a knowledge user, and the knowledge user for the act of reuse, is more effective than a simpler incentive scheme that merely rewards knowledge sharing when usefulness level is low. Ambiguity intolerant individuals react equally to both types of incentive schemes regardless of usefulness. Ambiguity tolerant individuals display weakly complementary levels of sharing in response to coordinated increases in incentives and usefulness levels. This has powerful implications for practice as both incentives and usefulness need not be increased in a concerted manner in order to promote use.

This is an experimental study with the use of student subjects and the usual caveats apply.

The contributions of this paper are deriving practitioner implications for the sharing/use of knowledge, the explicit consideration of ambiguity tolerance, and inclusion of both knowledge contribution and use in one comprehensive model.

This study examines how two important situational factors (corporate diversification and business unit strategy) and two elements of a firm’s administrative system (accounting‐based budgetary controls and associated incentives) affect the presence of slack in business unit budgets in diversified firms. The relationships among these variables are established by building on theories from organizational economics, the information‐processing view of organizations, and organizational behavior. Data are collected from 37 firms and 153 business units within these firms. The main results indicate: that corporate diversification is positively associated with slack in business unit budgets; and that tight budgetary controls and high‐powered incentives effectively curtail such slack. However, diversification does not seem to drive corporate managers to rely more on these systems to reduce higher budgetary slack associated with diversification. This suggests: that diversified firms employ a conscious strategy of slack at the business unit level to reduce information‐processing needs at the top; or that the design of the internal management control system is a function of factors other than corporate diversification. With respect to the latter explanation, the results indicate that business units that pursue a differentiation strategy receive less tight budgetary controls, which leaves them with the necessary slack to effectively pursue the critical success factors on which their strategies are built.

Aims to discuss incentive schemes within sales management circles and illustrates effects on sales staff. Believes that there is a belief among writers that the ‘carrot and stick’ method prevails within the selling/marketing fraternity, but purports to show that sales people are motivated by the anticipated satisfaction that comes with performance, rather than by performance itself, stating that self‐esteem has a direct effect on performance. States that three main areas bear on the incentive system: monetary incentives affect goal setting; lower goals allow rewards to be obtained easier so resulting in lower performance; personalized income may be increased if budgeted individuals set own goals. Proposes in summation that middle‐term sales disciplines should be quantified and assessed by means of a merit‐based appraisal scheme. Concludes that it is naive to assume that incentives motivate sales people to perform more effectively and that sales managers have the power of improved motivation in their hands.

The choice of proper incentives is a critical step in designing strategic planning systems. Incentives should integrate the behavior and action of managers with the objectives and strategies of their firms. The problem of inappropriate incentives in various types of organizations has been described by Kerr. While the literature on incentives is voluminous, the linkage between incentives and strategic planning has not been carefully explored. We propose a model that connects a firm's incentive systems with its strategic context, using incentives theory in the economics literature as basic building blocks.

It is always of great importance for managers in organizations to evaluate their staff members and create incentive systems, using instruments such as Data Envelopment Analysis (DEA) and DEA-R (DEA models based on ratio analysis). The purpose of this paper is to propose a two-stage network incentives system for commercial banks.

Centralized Resource Allocation (CRA) models make it possible to project all decision-making units (DMUs) onto the efficient frontier by solving a single linear programming model. In this paper, we use our proposed DEA-R-based CRA models to evaluate commercial banks in a two-stage case when the only ratios available are the assets-to-costs and income-to-assets vectors.

Thirteen commercial banks modeled as two-stage networks were evaluated by the models proposed in two different cases of ratio data. Results suggest that the proposed methodology yields more accurate efficiency scores, thus allowing better discrimination among DMUs. Furthermore, evaluating the DMUs when they are structured as two-stage (or even three-stage) networks makes it possible to examine the incentives system in more detail. Therefore, the use of incentive systems by managers would allow a better focus on the priority activities of commercial banks and a faster movement toward the frontier of best practices.

The super-efficiency scores of a number of commercial banks are evaluated based on the CRA model, as a cornerstone criterion for the two-stage evaluation in DEA-R, thus allowing the rank of each commercial bank in terms of the incentives system rather on the performance of the productive process.