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| Author: | Posselt, T. |
| Title: | Erfolgsbeteiligung bei Aktivitäts- und Risikoverbund |
| Journal: | Zeitschrift für Betriebswirtschaft
1997 : VOL. 67:3, p. 361-384 |
| Index terms: | PAY INCENTIVES EQUAL PAY RISK SHARING TOP MANAGEMENT MANAGERS INTERDEPENDENCY |
| Language: | ger |
| Abstract: | The development of incentive payment-systems usually builds on the relationship between top management and a division manager. This is reflected by the deduced proposition that the optimal payment consists of a fixed and a profit-dependent component. Cross-division relations are neglected. This paper analyses the effects on optimal incentive pay when interdependencies between divisions exist. Performance-related interdependencies require coordination between divisions. It is shown that a modified payment-system can achieve the desired incentives when the manager s payment depends on a third component assessing the value of the manager s performance for the other division. |
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