Performance Evaluation and Compensation:

Theory and Empirical Evidence

Instructors

Raffi J. Indjejikian

(Ross School of Business, University of Michigan)

and

Dhananjay Nanda

(University of Miami)

Munich, June 12-14, 2012

 

This course will examine performance evaluation and compensation research in accounting from an agency perspective. Initially, the emphasis will be on foundational theoretical research – mostly “contracting” models between two parties, one of which only has imperfect information about the other’s preferences or information or is unable to observe the other’s behavior. However, some agency-based empirical papers in accounting as well as papers that combine both empirical and analytical methods will also be reviewed.

The main topics include:

  • Choice of performance measures (accounting versus market-based, divisional versus firm-level, financial versus non-financial, input versus output);
  • Role of performance targets and standards;
  • Link between compensation and performance.

The primary objective of the course is to introduce young researchers in accounting to current research paradigms related to performance measurement and to identify promising avenues for future research.

A detailed agenda may be downloaded here (pdf, 56kb).

 

Introductory Articles:

Indjejikian, R.J. and M. Matejka, “Accounting Decentralization and Performance Evaluation of Business Unit managers”, The Accounting Review, 2012.

Indjejikian, R.J. and D. Nanda, “Executive Target Bonuses and What They Imply About Performance Standards”, The Accounting Review, 2002.