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The current study examines the performance effects of financial incentives for a simple, recurrent task designed to simulate an assembly-line setting. The study looks at early performance, improvement and overall performance. For a new task, performance-based incentives appear to improve the initial performance of the task but not subsequent improvement rate (Bailey et al., 1998). The current paper reports on a laboratory experiment whose results confirm the findings of Bailey et al. (1998) but also indicates that for both performance-based and fixed incentives, significant performance improvement takes place well beyond the initial performance of the task, declining gradually over time. This is in contrast with the suggestion of Bailey et al. (1998) that workers with performance-based incentives will choose to improve initial performance rather than subsequent performance. Findings also suggest that improvement peaks earlier for performance-based incentives than for a fixed incentive. Improvement persisted longer and there was better overall performance with the high fixed component quota and piece rate incentives than with the low fixed component quota implying that incentives that impose higher risk (e.g. a low fixed component quota incentive) on workers result in de-motivation and lower performance.

We analyze the role of top managers in the process of improving existing products in large established firms. The results of an inductive study reveal two key arguments. First, we find that the process is an “involved” top-down approach, rather than middle-up-down or bottom-up, discussed in previous studies on new product creation. Top managers actively participate throughout the process, taking on four roles: evaluation of product market performance, selection of products for improvement, initiation of the innovation process through delegation to middle managers of the responsibility to organize bottom-level employees to take actions toward product improvement, and monitoring of progress to ensure improvement (ESIM). Top managers become involved as necessary to reduce the resistance of people at the middle and lower levels to change in current routines. Second, we find that in companies that achieve superior product improvement, managers have well-developed professional absorptive capacity and have routinized frequent interactions to evaluate, select, initiate, and monitor. Other characteristics of managers, such as personal absorptive capacity, incentive system, or mandate from above, are common across both high and low performers.

This study uses structural equation modeling to investigate the impact of ABC implementation factors (management support, clarity and consensus of ABC objectives, non-accounting ownership, and training) on quality, cost, and cycle time improvements, the relations among quality, cost, and cycle time improvements and, the influence of quality, cost, and cycle time improvement on financial performance at the business unit level. Overall, the results of the structural analyses support the theoretical model indicating that ABC implementation factors influence quality, cost, and cycle time, and partial support for the relations among quality, cost, and cycle time improvement and their effect on financial performance. When these relationships are further analyzed within the context of ABC implementation stage, adoption of advanced manufacturing practices, industry characteristics and plant size to determine if these contextual factors impact the model constructs and the relationships between the variables in the theoretical model, the results show that these contextual factors do not affect the model constructs, however, they affect the model relations.

This study investigates the relationship between lean manufacturing practices, management accounting and performance measurement (MAC & PM) practices, organizational strategy, structure, and culture, and facility performance. We extended past research by examining the relationships between lean manufacturing, MAC & PM practices and performance in a broader organizational context. Our study was performed using survey data provided by managers and executives at 368 facilities that had contacted the Shingo Institute for information or that had entered a Shingo Prize competition. Consistent with past research we found a significant positive association between lean manufacturing practices and lean MAC & PM practices. We found that greater employee empowerment, use of process performance measures, and use of lean accounting practices were driven primarily by lean strategy and secondarily by the extent of lean manufacturing practices. We also found that changes in organization structure to support lean are driven primarily by lean strategy and secondarily by lean manufacturing practices. Change toward lean culture, on the other hand, is driven by the extent of lean manufacturing practices. Further, we found that emphasizing process performance measures does not reduce emphasis on results performance measures and emphasizing results performance measures leads to improved financial performance. Process and results measures are being used in tandem and value stream costing has not replaced traditional accounting. The results of our study provide important insights for managers of companies engaged in lean transformation and for academics who teach or research lean accounting.

The quality of teaching across the world is often defined by students’ academic achievement. Yet, teaching and learning is a complex phenomenon. Standards and policy documents, internationally and within India, specify knowledge and skills for teachers. A variety of evaluation tools exist to measure teaching performance. The authors describe a Teacher Performance Review Process (TPRP) using a diagnostic tool internationally benchmarked and contextualized for India. Initially, 408 teachers from 10 schools completed the TPRP, with 95 teachers from 3 schools completing two cycles of TPRP. The TPRP incorporated multiple sources of evidence for rating each teacher on 27 performance indicators using a four-point scale. Rating frequencies were analyzed and results reported for an initial and second cycle of TPRP. Feedback from teachers and school leaders indicated this process supported improving the quality of teaching. TPRP, implemented as a cyclical process capturing evidence from multiple sources over time, potentially provides comprehensive documentation of the complex phenomenon of teaching performance, and supports teachers in continuous improvement.

Purpose: The purpose of this study is to assess the main and interaction effects of activity-based costing (ABC), internal information systems integration (IISI), and external information systems integration (EISI) on manufacturing plant operational performance, controlling for plant characteristics.

Methodology/approach: The study uses survey data from a cross-section of 369 U.S. manufacturing plants. Data were analyzed using hierarchical regression model.

Findings and implications: The results indicate partial support for the main and two-way interaction effects on plant operational performance. The three-way interaction effects are significant and positive, suggesting that deploying all three resources (i.e., ABC, IISI, and EISI) leads to the higher plant operational performance.

Originality/value: The paper significantly extends prior research and contributes to the understanding of the main and interaction effects of ABC, IISI, and EISI on manufacturing plant operational performance. The paper would also be of interest to practitioners interested in keeping up with academic literature.

Purpose – This research aimed to study the relationship between Enterprise Risk Management (ERM) and performance improvement.

Design/methodology/approach – A questionnaire was used as an instrument of data collection that was passed to managers of nonfinancial companies listed among the 500 largest and best firms in Brazil. The data from this study were analyzed with descriptive statistics and multivariate analysis of correlation and association.

Findings – The results showed that the main drivers of risk management were regulation, stakeholder demands, and business competitiveness. Among the practices that have been used, managers spotlight the utility of basic methods, more subjective, while technical methods, more quantitative, were of secondary importance. It was evidenced that the risks were weighted in the main activities of the organization. As a result, it was demonstrated that improved performance is associated with the maturity level of risk management and the level of stakeholders’ involvement in risk management.

Research limitations/implications – Other researches could examine how this process was developed in other countries and expand the number of organizations studied.

Practical implications – This study provides empirical evidence about theorist assumptions about the relationship between ERM and performance improvement.

Social implications – This study demonstrates the importance of human aspects for the processes of risk management and how external factors can influence this process.

Originality/value – It gives a broader and deeper comprehension of the process of risk management at nonfinancial firms in Brazil.

This study collected perceptual data from 162 manufacturing managers to assess whether their perception of organizational learning is related to firm profitability or whether the relationship is indirect through firms’ competitive advantage (quality improvement, cost improvement, cycle-time improvement). The results indicate that managers perceive that organizational learning is significantly related to competitive advantage that, in turn, is positively related to profitability. The results also indicate that the relation between organizational learning and profitability is fully mediated by firm competitive advantage.

We demonstrate in a laboratory experiment that the effectiveness of performance-contingent incentives is inversely related to risk-aversion levels. For about 16.5% of participants, performance fails to improve under performance-pay, and the probability of such failure increases with risk-aversion. This phenomenon works in part through the reduced effort level of more risk-averse individuals when effort level is positively correlated with risk exposure. It is also associated with higher self-reported levels of stress by more risk-averse people working under performance-contingent pay. We find no evidence of such stress causing decrements in the quality of effort affecting performance after controlling for effort level. However, controlling for effort, more risk-averse participants perform better under a fixed salary, leaving less room for improvement under performance-pay.