search query: @author Banker, R. D. / total: 19
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Author: | Banker, R. D. Datar, S. M. |
Title: | Sensitivity, precision, and linear aggregation of signals for performance evaluation. |
Journal: | Journal of Accounting Research
1989 : SPRING, VOL. 27:1, p. 21-39 |
Index terms: | MANAGEMENT ACCOUNTING MANAGEMENT APPRAISAL PERFORMANCE MEASUREMENT EXECUTIVE REMUNERATION |
Language: | eng |
Abstract: | The paper considers the problem of how to aggregate linearly the signals to obtain an optimal performance evaluation. Propositions 1 and 2 identify necessary and sufficient conditions under which some linear aggregation is optimal for all agencies , and for a subclass the underlying optimal weights are interpreted in terms of sensitivity, precision and intensiveness of the individual signal. Among others, pure profit is a good measure only if the sensitivity times precision (intensity) of revenue and cost is equal. |
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