Recent studies have shown that the congruence (i.e. value relevance) of accounting earnings-based measures of performance (e.g., earnings, residual income) has been declining significantly over an extended period of time. We confirm this prior finding, and examine the implications of poor...

We examine the extent to which firms use past performance as a basis for setting earnings targets in their bonus plans and assess the implications of such targets for managerial incentives. We find that high-profitability firms commonly reduce earnings targets when their managers fail to meet...

Preface -- Acknowledgements -- The control function of management -- Management and control -- Management control alternatives and their effects -- Results controls -- Action, personnel, and cultural controls -- Control system tightness -- Control system costs -- Designing and evaluating...

This paper reports the findings of an archival and field study that explores the details of the design and functioning of a complex performance evaluation and incentive system, one that bases incentive payouts on both organizational and individual performance ratings. The archival data include...