[9_1]_2011_안태식_외_성과평가시스템에서의_목표설정_kar

As a criterion for determining future targets

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: targets (Weitzman 1980). Given the uncertainty about the true performance capability of ratees, raters regard the performance in any period as the revealed minimal level of their capabilities in the next period (Berliner 1976). Therefore, in a principalagent setting, the ratchet principle is adopted if contracts explicitly or implicitly reflect past performance information because performance information reduces the variance with which future performance is measured (Milgrom and Roberts 1992). We find a symmetric ratchet principle for performance measures of which targets are revised by a formula, and a super-variable ratchet principle for performance measures of which targets are set by ratees’ participation. Surprisingly, targets for the next year increases rather than decreases when ratees miss targets at any period for performance measures of which targets are endowed by raters. Finally, we investigate the determinants of next period’s targets in order to establish that firms design targets to motivate their executives optimally. Leone and Rock (2002) consider two determinants, whether or not and how much ratees' beat (or meet) targets. Besides them, we additionally examine how much performance at any period increase compared to prior period’s performance and how much targets at any period change compared to prior period’s targets. We find that whether or not and how much ratees’ beat (or meet) targets are significant determinants of target-setting, while change in target is insignificant. In addition, change in performance has an influential effect on the next period’s target-setting when the fact whether ratees’ beat (or meet) targets or not is considered. However, we find that change in performance is no longer significant when the fact how much ratees’ beat(or meet) targets is additionally included in the regression model. Our findings that ratcheting pattern depends on the degree of ratee’s participation in the target-setting process suggest that the more ratees participate in targetsetting, the more easily achievable targets seem to be set. They also imply that the current GOEs’ target-setting mechanism may induce temporarily improved performance rather than persistent innovation in performance. Key words: Target-setting, Participative target-setting, Ratchet ratchet principle, Persistent innovation in performance principle, Asymmetric 186 회 계 학 연 구 Ⅰ. 서 론 본 연구는 성과평가제도에서 목표설정(target setting)이 어떻게 이루어지고 있는지에 대 해 다양한 실증모델을 이용하여 분석한다. 목표설정은 기업의 투자의사결정에 영향을 끼칠 뿐만 아니라(Ittner and Larcker, 2001), 기업이 가지고 있는 자원의 효율적인 배분(Leone and Rock, 2002)과 경영자 및 조직의 합리적인 성과평가를 유도(Ittner and Larcker, 2001; Leone and Rock, 2002)하여 궁극적으로 기업의 가치를 향상시키는데 매우 중요한 역할...
View Full Document

This document was uploaded on 09/24/2013.

Ask a homework question - tutors are online