سرمایه انسانی، ساختار پرداخت و استفاده از معیارهای عملکرد در جبران خسارت

Traditional financial measures have been criticized for lacking relevance in today's economy where firms are increasingly competing with intangible assets. However, perhaps this criticism is not detrimental to firms if they take actions to supplement the information contained in financial measures. Thus, it is important to explore whether and when firms recognize this potential deficiency and take action to acquire the appropriate information. This study hypothesizes that two human resource variables, reliance on human capital and the firm's pay structure, are associated with the use of non-financial measures in top managers’ bonus compensation contracts since they provide information incremental to that provided by traditional financial measures. Using archival data from 177 firms, I estimate binary and multi-response ordered logit models. The binary logit model provides evidence that labor-intensive firms have a higher probability of placing emphasis on non-financial measures (along with traditional financial measures) and a lower probability of relying solely on traditional financial measures. Moreover, this relationship is moderated by the firm's pay structure. Analysis shows that the relationship is stronger in firms that employ a hierarchical pay structure. Furthermore, the multi-response logit model extends these finding by showing that these firms also have a higher probability of relying on human resource measures.

Executive compensation provokes debate on many fronts,1 one of which is that emphasis on financial measures leads executives to focus on the short-term. Stone (Business Week, December 23, 2002) summarizes the issue by saying, The primary problem in Corporate America is not with investors’ short-term focus on quarterly results, but with management's desire to achieve short-term goals because of their impact on executive compensation. ‘With the obsessive focus on quarterly numbers, management is motivated to make decisions that are pragmatic from a short-term perspective but may impair the long-term health of the organization,’ says Jeffrey Evans, president of the New York Society of Security Analysts. Consider a common decision that executives make regarding investment in human capital. Compensation, training, and other related costs are expensed in the current period. Executives focused on quarterly financial numbers have an incentive to forego labor-related investment in order to enhance the quarterly financial results, even though the disinvestment may be detrimental to the long-term health of the organization (Laverty, 1996). The purpose of this study is to provide evidence on the debate by examining the use of performance measures in executive bonus compensation and determining whether firms that rely heavily on labor to sustain its operations supplement traditional financial measures with non-financial measures. Executive bonus compensation provides an interesting setting for two reasons. First, it is a significant part of executive pay.2 Second, it is the portion of executive compensation that is intended to motivate managerial behaviors (Milkovich and Newman, 2002, Balkcom et al., 1997 and Vancil, 1979). Traditionally, compensation contracts have been written based on financial accounting measures, especially net income, earnings per share, and return on assets (McKenzie and Shilling, 1998). The prevailing view is that traditional financial measures encourage a short-term focus (Laverty, 1996) while non-financial measures focus managers on making decisions that are healthier for the long run (Kaplan and Norton, 1996). Thus, the design of executive bonus compensation provides a rich setting to study the use of financial and non-financial performance measures. This study investigates the association between the use of performance measures and the reliance on human capital. Labor, or human capital, is a critical type of intangible asset on which firms increasingly rely (Lev, 2001). The term “human capital” has many different definitions. Economists consider human talent and knowledge to be both a form of wealth and capital (Lev and Schwartz, 1971). Strategists define strategic human capital as the portion of the workforce that helps the firm sustain its competitive advantage ( Barney and Wright, 1998). The broadest definition of human capital and one found in the organizational behavior literature is that it is the knowledge and/or skills possessed by the firm's workforce ( Lev, 2001, Barney, 1991 and Becker et al., 2001). Kaplan and Norton (1996, p. 6) state, Now all employees must contribute value by what they know and by the information they can provide. Investing in, managing, and exploiting the knowledge of every employee have become critical to the success of information age companies. In accordance with the latter line of research discussed above, I define human capital as the firm's workforce (i.e., the value contributed through the workforce's contribution via skills and knowledge). I also investigate an important contextual factor that may influence the relation between the use of performance measures and the reliance on human capital—the firm's design of its pay structure. I draw on both economic theory (i.e., the informativeness principle) and social psychology theory (i.e., equity theory) to develop hypotheses. Agency theory embraces rational choice models; research often investigates how performance measures can be used to more closely align employee actions with the objectives of owners (Ittner et al., 1997). However, employees work in a social environment and “one's actions frequently and unavoidably shape, and are shaped by, the actions of others” (Sprinkle, 2003, p. 295). In this setting, agency theory generally disregards effects from salary and bonus apportionment; however, since research shows that matters of equity are important to employees (Cowherd and Levine, 1992), incorporating both theories allows me to undertake a more complete investigation of the use of performance measures. Indeed, Sprinkle (2003) calls for research that incorporates the apportionment of rewards on performance-based contracts. Ittner et al. (1997) use the informativeness principle as the basis of an investigation of the use of performance measures in CEO bonus compensation. They argue that traditional financial measures may be appropriate for CEOs in firms focused on cost minimization; however, for CEOs in firms following either a quality or an innovation-oriented strategy, non-financial measures will provide incremental information regarding the firm's long-term strategic objectives and help better align interests within the firm. Extending this, I rely on the informativeness principle to argue that the use of non-financial information will provide relevant information incremental to that provided by traditional financial measures when the firm relies on human capital. I then draw on equity theory, which predicts that employees’ behaviors and attitudes are negatively affected when they perceive inequity in the firm's pay structure. Sprinkle (2003) notes that issues of fairness and equity may well influence contracting. In my setting, it is likely that the perception of (a lack of) fairness will (exacerbate) mitigate moral hazard issues. I argue, therefore, that the association between the likelihood of using non-financial measures in bonus compensation and the use of human capital will depend on the design of the firm's pay structure. Using disclosure information from the proxy statements of 177 firms, I classify the use of information in bonus compensation into two categories: (1) firms that emphasize financial measures versus (2) firms that use both financial and non-financial measures. Using a cross-sectional, binary logistic model I find that the likelihood of using both financial and non-financial measures is increasing in labor intensity3 and that the relation is more positive when the firm employs a hierarchical pay structure. This finding supports the argument that the pay structure moderates the association between the use of human capital and the use of non-financial measures in executive bonus compensation. Thus, the incremental information content of non-financial measures is important in the monitoring and control process in labor-intensive firms. I extend the analysis by subdividing the two broad categories of performance measures into four categories characterized as firms that rely on: (1) financial information only, (2) financial and non-financial information, but a financial threshold must be met, (3) financial and non-financial information with no financial threshold, and (4) financial and non-financial information with specific mention of human resource measures (e.g., employee satisfaction, turnover, training). Using a multi-response logistic model, I find evidence consistent with the base model results and extend the results to directly investigate the use of human resource measures. This study extends prior literature by investigating two relevant and topical organizational variables. Today's economy has an increased focus on the use of human capital (Lev, 2001); firms are increasingly relying on human capital and there is certainly much debate over the design of executive compensation. Thus, if evidence is to be provided on this growing debate, it is important to understand when (and whether) firms use non-financial information to supplement traditional financial information in compensation contracting. The study has practical implications for those who design performance measurement systems. First, it appears that firms are using non-financial measures to focus top executives’ attention on the firm's long-term, strategic objectives. Second, when choosing measures to include in a reward system, it is important to consider contextual factors such as the pay structure. This study also provides insights to researchers who evaluate and attempt to understand the use and design of performance measurement systems. An important theoretical implication is that agency theory, at least in this setting, is incomplete. To gain a more complete understanding of the use of performance measures in contracting, researchers should consider multiple theories of behavior. The remainder of this paper is organized as follows. Section 2 presents a discussion of related literature and develops the hypotheses. A description of the research method is found in Section 3. Results are presented in Section 4. Finally, conclusions and limitations, along with a discussion of the results as related to relevant human capital issues such as firm performance and knowledge transfer, are found in Sections 5 and 6.

The finding that there is a positive relation between human capital and the use of non-financial measures is perhaps not surprising, although it does provide empirical evidence on underlying theory. More importantly, I find that that the dispersion in pay structure has strong implications for the design of the incentive scheme in firms that rely on human capital. This result is consistent with contingency theory regarding the importance of contextual variables, such as organizational structure. This finding demonstrates that managers responsible for designing management control systems, and more specifically incentive systems, must understand the importance of the context with which the system is to be designed. In organizations that require collaborative effort, share knowledge, and depend on organizational learning, it is likely that incentive schemes will include non-financial measures, especially those measures that directly translate and communicate strategy throughout the organization. However, this study points out that it is critical to understand the context with which the management control system is to operate. Non-financial measures are apparently even more important when the firm relies on human capital and has perhaps unintentionally created feelings of inequity within the firm through the use of a hierarchical pay structure.