Effects of a Tournament Incentive Plan Incorporating Managerial Discretion in a Geographically Dispersed Organization
利用零售连锁数据，研究基于客观绩效但纳入管理层自由裁量权选择获胜者的锦标赛激励计划，发现其平均提升门店销售，对地理距离远的参与者更有利，且资源约束影响结果。
Using retail chain data, we study the effects of a tournament incentive plan based primarily on objective performance, but incorporating managerial discretion in the selection of winners. In principle, such plans could motivate employees to perform both at a high level, based on objective criteria, and in accordance with company values, considered via managerial discretion. However, such plans could be counterproductive if enough participants (especially those who do not win) perceive that subjectivity (introduced via discretion) adds unfairness. We show that, on average, the tournament incentive plan was associated with improved store sales. We also find that such plans can be more beneficial for geographically distant participants, where the potential for improving alignment is greater. Lastly, we find some evidence that participants’ resource constraints (potentially affecting unfairness concerns) can impact outcomes under the plan. This paper was accepted by Shiva Rajgopal, accounting.