DP6107 Incentives and Managerial Experience in Multi-Task Teams: Evidence from Within a Firm

Author(s): Rachel Griffith, Andrew Neely
Publication Date: February 2007
Keyword(s): balanced scorecard, incentive design, managerial experience
JEL(s): J33, M12, M52
Programme Areas: Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=6107

This paper exploits a quasi-experimental setting to estimate the impact that a multi-dimensional group incentive scheme had on branch performance in a large distribution firm. The scheme, which is based on the Balanced Scorecard, was implemented in all branches in one division, but not in another. Branches from the second division are used as a control group. Our results suggest that the balanced scorecard had some impact, but that it varied with branch characteristics, and in particular, branches with more experienced managers were better able to respond to the new incentives.