Assessing the Performance of Business Unit Managers

J.F.M.G. Bouwens, L.A.G.M. van Lent

Research output: Working paperDiscussion paperOther research output

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Abstract

Using a sample of 140 managers, we investigate the use of various performance metrics in determining the periodic assessment, bonus decisions, and career paths of business unit managers.We show that the weight on accounting return measures is associated with the authority of these managers, and we document that both disaggregated measures (expenses and revenues), and non-financial measures play a greater role as interdependencies between business units increase.The results suggest separate and distinct roles for different types of performance measures.Accounting return measures are used to create the proper incentives for managers with greater authority, while disaggregated and non-financial measures are employed in response to interdependencies.
Original languageEnglish
Place of PublicationTilburg
PublisherAccounting
Number of pages40
Volume2006-92
Publication statusPublished - 2006

Publication series

NameCentER Discussion Paper
Volume2006-92

Fingerprint

Managers
Authority
Interdependencies
Non-financial measures
Bonus
Career paths
Performance metrics
Expenses
Performance measures
Incentives
Revenue

Keywords

  • performance measures
  • business units
  • managerial performance

Cite this

Bouwens, J. F. M. G., & van Lent, L. A. G. M. (2006). Assessing the Performance of Business Unit Managers. (CentER Discussion Paper; Vol. 2006-92). Tilburg: Accounting.
Bouwens, J.F.M.G. ; van Lent, L.A.G.M. / Assessing the Performance of Business Unit Managers. Tilburg : Accounting, 2006. (CentER Discussion Paper).
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Bouwens, JFMG & van Lent, LAGM 2006 'Assessing the Performance of Business Unit Managers' CentER Discussion Paper, vol. 2006-92, Accounting, Tilburg.

Assessing the Performance of Business Unit Managers. / Bouwens, J.F.M.G.; van Lent, L.A.G.M.

Tilburg : Accounting, 2006. (CentER Discussion Paper; Vol. 2006-92).

Research output: Working paperDiscussion paperOther research output

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N2 - Using a sample of 140 managers, we investigate the use of various performance metrics in determining the periodic assessment, bonus decisions, and career paths of business unit managers.We show that the weight on accounting return measures is associated with the authority of these managers, and we document that both disaggregated measures (expenses and revenues), and non-financial measures play a greater role as interdependencies between business units increase.The results suggest separate and distinct roles for different types of performance measures.Accounting return measures are used to create the proper incentives for managers with greater authority, while disaggregated and non-financial measures are employed in response to interdependencies.

AB - Using a sample of 140 managers, we investigate the use of various performance metrics in determining the periodic assessment, bonus decisions, and career paths of business unit managers.We show that the weight on accounting return measures is associated with the authority of these managers, and we document that both disaggregated measures (expenses and revenues), and non-financial measures play a greater role as interdependencies between business units increase.The results suggest separate and distinct roles for different types of performance measures.Accounting return measures are used to create the proper incentives for managers with greater authority, while disaggregated and non-financial measures are employed in response to interdependencies.

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KW - managerial performance

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Bouwens JFMG, van Lent LAGM. Assessing the Performance of Business Unit Managers. Tilburg: Accounting. 2006. (CentER Discussion Paper).