Factors Influencing Award of Compensation Contraacts: An Analysis of Written Protocols

This study reports the results of an analysis of written protocols collected in a laboratory experiment from 77 subjects while they were making compensation contract selection decisions. Each subject made compensation decisions for four divisional managers operating under them. The researchers varied the level of environmental uncertainty, as well as the level of perceived agent effectiveness. The results show that the type of factors considered by the individuals differed significantly. Subjects indicated that they focused more heavily on one of the two manipulated conditions, but not equally on both. It was also found that, overall, agent effectiveness factors weighed more heavily in the compensation decisions than uncertainty considerations. Additionally, it was found that subjects used some factors in their decisions that were not part of the experimental treatments, lending further evidence to the individuality of influences on compensation contract selections

Realizing IT Value at Air Products and Chemicals, Inc.

How can senior IS executives successfully shepherd IT initiatives through complex organizations? This paper prescribes an integrated IT investment management process incorporating four recommended activities: *strategic planning, *quality function deployment, *activity analysis, and *responsibility assignment. The process, tools, methods, and organizational learning were drawn from two projects at Air Products and Chemicals, Inc. The integrated process for IT investment management can help senior IS executives prioritize projects and align responsibility and accountability for IT initiatives that require complementary organizational changes to activities across the entire value chain to realize full benefits

The Effect of Uncertainty and Information Asymmetry on the Structure of Compensation Contracts: A Test of Competing Models

This research note reports results of a laboratory experiment conducted as a follow-up investigation of an earlier study by Umanath, Ray and Campbell (Umanath, N. S., M. R. Ray, T. L. Campbell. 1993. The impact of perceived environmental uncertainty and perceived agent effectiveness on the composition of compensation contracts. Management Sci. (January) 32--45.). Here, we focus on a specific unexpected result of Umanath et al. who found evidence contradicting the theoretical prediction with respect to the impact of environmental uncertainty on the composition of compensation contracts. Umanath et al., in retrospect, offered an explanation for their unexpected finding based on an alternative theory under the same agency framework. Our results not only ratify the alternative explanation offered by Umanath et al., but also identify information symmetry/asymmetry as the contingent factor capable of reconciling the apparently contradicting predictions of the two agency-based theories used in this research.compensation plans, agency theory, incentive contracts, salary-incentive mix, information asymmetry