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Performance Measurement and Incentive Compensation: An Empirical Analysis and Comparison of Chinese and Western Firms' Practices
This paper describes the findings of a study aimed at providing a replication and extension in China of studies focused on incentive compensation practices of automobile retailers in the USA and the Netherlands. Rich, detailed data-sets from all three countries are analysed together and in compariso...
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Published in: | The European accounting review 2011-12, Vol.20 (4), p.639-667 |
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creator | Merchant, Kenneth A. Van der Stede, Wim A. Lin, Thomas W. Yu, Zengbiao |
description | This paper describes the findings of a study aimed at providing a replication and extension in China of studies focused on incentive compensation practices of automobile retailers in the USA and the Netherlands. Rich, detailed data-sets from all three countries are analysed together and in comparison. As theory is not well developed at the level of detail of the data collected, the purpose of this study was primarily exploratory, to provide empirics that can lead to the development of theory. The findings show that Chinese firms are much more likely to provide incentive compensation than are Dutch firms, and they are even somewhat more likely to provide them than are US firms. But Chinese bonus plans are more likely to be subjective, rather than formula-based. In the situations where incentive payments are based on pre-set formulas, the Chinese firms' systems are more like those used in the Netherlands than in the USA, with bonuses based on non-financial performance measures and with more complex performance-reward functions. Like managers in the US firms, but unlike managers in the Dutch firms, Chinese managers who receive some form of incentive compensation are more satisfied with their pay. The paper concludes with tentative explanations of the findings and suggestions for future research. |
doi_str_mv | 10.1080/09638180.2011.593293 |
format | article |
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Rich, detailed data-sets from all three countries are analysed together and in comparison. As theory is not well developed at the level of detail of the data collected, the purpose of this study was primarily exploratory, to provide empirics that can lead to the development of theory. The findings show that Chinese firms are much more likely to provide incentive compensation than are Dutch firms, and they are even somewhat more likely to provide them than are US firms. But Chinese bonus plans are more likely to be subjective, rather than formula-based. In the situations where incentive payments are based on pre-set formulas, the Chinese firms' systems are more like those used in the Netherlands than in the USA, with bonuses based on non-financial performance measures and with more complex performance-reward functions. Like managers in the US firms, but unlike managers in the Dutch firms, Chinese managers who receive some form of incentive compensation are more satisfied with their pay. The paper concludes with tentative explanations of the findings and suggestions for future research.</description><subject>Automobile dealers</subject><subject>Automobiles</subject><subject>Bonuses</subject><subject>China</subject><subject>Compensation</subject><subject>Data analysis</subject><subject>Empirical research</subject><subject>Incentives</subject><subject>Managers</subject><subject>Netherlands</subject><subject>Performance appraisal</subject><subject>Retail trade</subject><subject>Studies</subject><subject>U.S.A</subject><issn>0963-8180</issn><issn>1468-4497</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2011</creationdate><recordtype>article</recordtype><sourceid>8BJ</sourceid><recordid>eNp9kc1u1DAUhS1EJYbCG7Cw2MAmg53rOA4bVI1aKGrVLopYWh7nRnWV2MFOWs2OR8eZAAsWLK5_v3N07UPIG862nCn2gTUSFFdsWzLOt1UDZQPPyIYLqQohmvo52SxIsTAvyMuUHhjjIEBsyM9bjF2Ig_EW6TWaNEcc0E_U-JZe5kM_uUekuzCM6JOZXPAf6Zmn58PoorOmzxvTH5JLR8XCmehS8DR0dHfvPCY83nzHNGH09MLFIb2jt9HYyVlMr8hJZ_qEr3_Pp-Tbxfnd7ktxdfP5cnd2VVghq6ngytR7zg1XALaq9i2UrJWq3TMp23wJFWtRViW0RnKlmgrqppbS7LHmrSgtnJL3q-8Yw485N6MHlyz2vfEY5qQ545WQtSh5Rt_-gz6EOeZnJt1wCcAAVIbECtkYUorY6TG6wcRDdtJLKvpPKnpJRa-pZNnXVRZxRPtXM5kO5-VL9KMGU7I8HI6LrATjcolcYy4JjZay1vfTkM0-rWbOHzN8CrFvs9ehD7GLOVKXNPy3nV83w6xx</recordid><startdate>201112</startdate><enddate>201112</enddate><creator>Merchant, Kenneth A.</creator><creator>Van der Stede, Wim A.</creator><creator>Lin, Thomas W.</creator><creator>Yu, Zengbiao</creator><general>Routledge</general><general>Taylor and Francis Journals</general><general>Taylor & Francis Ltd</general><scope>DKI</scope><scope>X2L</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>201112</creationdate><title>Performance Measurement and Incentive Compensation: An Empirical Analysis and Comparison of Chinese and Western Firms' Practices</title><author>Merchant, Kenneth A. ; Van der Stede, Wim A. ; Lin, Thomas W. ; Yu, Zengbiao</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c465t-18a7b11a1833c55bd320d68db066d18a350de6523da618895379766abe71d42c3</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2011</creationdate><topic>Automobile dealers</topic><topic>Automobiles</topic><topic>Bonuses</topic><topic>China</topic><topic>Compensation</topic><topic>Data analysis</topic><topic>Empirical research</topic><topic>Incentives</topic><topic>Managers</topic><topic>Netherlands</topic><topic>Performance appraisal</topic><topic>Retail trade</topic><topic>Studies</topic><topic>U.S.A</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Merchant, Kenneth A.</creatorcontrib><creatorcontrib>Van der Stede, Wim A.</creatorcontrib><creatorcontrib>Lin, Thomas W.</creatorcontrib><creatorcontrib>Yu, Zengbiao</creatorcontrib><collection>RePEc IDEAS</collection><collection>RePEc</collection><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>The European accounting review</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Merchant, Kenneth A.</au><au>Van der Stede, Wim A.</au><au>Lin, Thomas W.</au><au>Yu, Zengbiao</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Performance Measurement and Incentive Compensation: An Empirical Analysis and Comparison of Chinese and Western Firms' Practices</atitle><jtitle>The European accounting review</jtitle><date>2011-12</date><risdate>2011</risdate><volume>20</volume><issue>4</issue><spage>639</spage><epage>667</epage><pages>639-667</pages><issn>0963-8180</issn><eissn>1468-4497</eissn><notes>ObjectType-Article-2</notes><notes>SourceType-Scholarly Journals-1</notes><notes>ObjectType-Feature-1</notes><notes>content type line 23</notes><abstract>This paper describes the findings of a study aimed at providing a replication and extension in China of studies focused on incentive compensation practices of automobile retailers in the USA and the Netherlands. Rich, detailed data-sets from all three countries are analysed together and in comparison. As theory is not well developed at the level of detail of the data collected, the purpose of this study was primarily exploratory, to provide empirics that can lead to the development of theory. The findings show that Chinese firms are much more likely to provide incentive compensation than are Dutch firms, and they are even somewhat more likely to provide them than are US firms. But Chinese bonus plans are more likely to be subjective, rather than formula-based. In the situations where incentive payments are based on pre-set formulas, the Chinese firms' systems are more like those used in the Netherlands than in the USA, with bonuses based on non-financial performance measures and with more complex performance-reward functions. Like managers in the US firms, but unlike managers in the Dutch firms, Chinese managers who receive some form of incentive compensation are more satisfied with their pay. The paper concludes with tentative explanations of the findings and suggestions for future research.</abstract><cop>London</cop><pub>Routledge</pub><doi>10.1080/09638180.2011.593293</doi><tpages>29</tpages></addata></record> |
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source | International Bibliography of the Social Sciences (IBSS); Business Source Ultimate; Taylor and Francis Social Sciences and Humanities Collection |
subjects | Automobile dealers Automobiles Bonuses China Compensation Data analysis Empirical research Incentives Managers Netherlands Performance appraisal Retail trade Studies U.S.A |
title | Performance Measurement and Incentive Compensation: An Empirical Analysis and Comparison of Chinese and Western Firms' Practices |
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