CN EN
Advanced

When does incentive compensation motivate managerial behaviors? An experimental investigation of the fit between incentive compensation, executive core self-evaluation, and firm performance

Indexed by

SSCI Scopus FT ABDC-A*

Abstract

We develop and test an integrative model that examines the fit between compensation schemes, executives' characteristics, and situational factors. We propose that a fit among all three factors is crucial to motivate desirable managerial behaviors. Using a specially designed management simulation, our study demonstrates that the effectiveness of incentive compensation to motivate managerial behaviors depends on executives' core self-evaluation and firm performance. Our results show that, relative to fixed salary compensation, executives with higher core self-evaluation respond to incentive compensation with greater perseverance, competitive strategy focus, ethical behavior, and strategic risk taking during organizational decline. However, these interaction effects are not present during organizational growth. Our theory and empirical evidence provide significant insights into the complex relationships among compensation schemes, executives' characteristics, firm performance, and managerial behaviors. 

Keyword

Author Community

[Chng, Daniel Han Ming] China Europe Int Business Sch, Shanghai 201206, Peoples R China

[Rodgers, Matthew S.] Ohio State Univ, Fisher Coll Business, Columbus, OH 43210 USA

[Shih, Eric] Sungkyunkwan Univ, SKK Grad Sch Business, Seoul, South Korea

[Song, Xiao-Bing] Dalian Univ Technol, Sch Business Management, Liaoning, Peoples R China


Related Article

Source

Strategic Management Journal

ISSN:0143-2095

Year:2012

Issue:12

Volume:33

Page:1343-1362

Powered by JCR@2012

ESI Discipline:ECONOMICS & BUSINESS;

Cited Count
W
Loading... 24
C
Loading...
Get Fulltext
Rights and Licenses
Related Keywords
Communities & Collections
Access Stats
Creative Commons Licence
The content of CEIBS Research Online is licensed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND 4.0).