Thesis (Ph. D.)--University of Chicago, Graduate School of Business, June 2001. / Includes bibliographical references. Also available on the Internet.

This thesis investigates how chief executive officer (CEO) equity incentives affect the remediation of material weaknesses (MWs) in internal control. First, we predict that the sensitivity of CEO stock and stock option portfolios to stock price (CEO price sensitivity or delta) has a positive impact on firm promptness in remedying MWs, because CEOs whose personal wealth is tied to stock price suffer losses from negative market reactions to the public disclosure of MWs. Second, we predict that the sensitivity of CEO stock option portfolio to stock-return volatility (CEO volatility sensitivity or vega) has a negative impact on firm promptness in remedying MWs, as firms with internal control weaknesses are associated with higher information and operating risks that manifest in stock return volatility. Our empirical results, based on a sample of firms disclosing MWs in internal control under the Sarbanes-Oxley Act (SOX) during November 15, 2003 and August 27, 2006, are consistent with the above predictions. We further provide evidence that an effective board of directors could mitigate the undesirable, negative impact of CEO volatility sensitivity on MWs remediation. We measure firms’ promptness in remedying MWs based on their subsequent internal control audit opinions (e.g., Ashbaugh-Skaife et al. 2008; Goh 2009); and CEO price (volatility) sensitivity as the dollar change in CEO stock and option portfolios (option portfolio) from a 1 percent change in stock price (Core and Guay 2002). This thesis is innovative with respect to the prediction and evidence of the opposing effects from CEO price and volatility sensitivities on internal control quality. This new evidence contributes to the literature that examines managerial incentives embedded in stock-based and option-based compensation plans in various economic contexts (e.g., Knopf et al. 2002; Coles et al. 2006; Low 2009; Armstrong et al. 2013). Our findings suggest that when stock constitutes a major part of CEO compensation, the mandatory disclosure requirement of SOX provides a channel for the stock market to discipline CEO. However, when options dominate CEO compensation, volatility sensitivity and the associated risk-taking incentive can cause CEOs to delay rectifying internal control deficiencies. These results have interesting policy implications for regulators and firms concerning mandatory disclosure and compensation design. Moreover, this thesis contributes to the broad literature on corporate governance by documenting an interaction between corporate governance and CEO incentives, namely that strong corporate governance mitigates the undesirable risking-taking incentive caused by CEO option holdings. Overall, this thesis deepens our understanding on mechanisms through which regulators, firm executives, and boards of directors strengthen internal control over financial reporting in the post-SOX era. / published_or_final_version / Business / Doctoral / Doctor of Philosophy

published_or_final_version / Economics / Master / Master of Philosophy

Tournament theory shows that a firm may motivate employees by running competitors for rewards either for a group or individualistic schemes. The empirical literature on Tournaments has been grown. However, many studies use no appropriate data. This paper provides the first empirical evidence on three key assumptions in these models using a special case surrounding the incentives for workers in public sector. The dataset contains information from the Coordenacao de Fiscalizacao (i.e., the Inspections Division) of the Secretaria da Receita Federal (SRF) on the bonus program created by the Brazilian government to compensate tax officials for their efforts in collecting taxes and uncovering tax violations. We constructed a larger unbalanced panel data Tax collection containing information upon 110 tax agencies distributed between 10 regions and 45 time period by month, which allowed us to support the predictions raised above. In order to examine the tournaments predictions we emphasize the dynamic of the process taking into account the unobserved heterogeneity and endogeneity problems using appropriate GMM techniques. This enable us to pondered the possible inertia for time adjustments within tax agency, possibly in determining strategies to improve the tax agency performance on the sources most valuable for collection, which supports the hypothesis of learning by doing. The results also demonstrated evidence to support the following tournaments hypothesis: (1) prizes motivate agents to exert effort; (2) number of participants increased as the size of the prize increase; (3) differential in wages and bonus directly affect workers incentives.

Thesis (M. S.)--Economics, Georgia Institute of Technology, 2008. / Committee Chair: Silva, Emilson; Committee Member: Kilic, Rehim; Committee Member: Li, Haizheng.

Thesis (Ph.D.(Technology Management))--University of Pretoria, 2008. / Summaries in Afrikaans and English. Includes bibliographical references.

Thesis (Ph. D.)--Ohio State University, 2006. / Title from first page of PDF file. Includes bibliographical references (p. 143-147).

Increasing competition within the freight transportation market in South Africa has intensified the need for rail industries to identify ways in which to enhance their competitiveness within this market. One of the most important challenges for organisations’ operating in this market is to deliver goods on time, while meeting the needs of customers, at the lowest possible cost. If such organisations are to remain competitive, it may be required of them to shift their focus to their employees. Research has shown that employees render organisations’ with sustainable competitive advantage, more specifically, it has shown that engaged employees surpass disengaged employees. The distinguishing factor for organisations’ in the search of competitive advantage would therefore be an engaged workforce. The primary research objective of this study was to investigate contribution of reward systems to enhanced employee engagement within Transnet Engineering (TE) in Swartkops, Port Elizabeth. A theoretical overview was conducted to evaluate different definitions, engagement theories and factors of reward systems which contribute to enhanced employee engagement. An empirical study was conducted by means of a survey with a questionnaire as data collecting tool. The purpose of the structured questionnaire was to validate the findings obtained from the theoretical overview and to assess employees’ perceptions of reward systems and engagement. Recommendations were made based on the findings of the literature and empirical study. These recommendations will assist the organisation in understanding how reward systems can be used to enhance employee engagement, so that a competitive advantage can be achieved within the freight transportation market.

Individual monetary incentive systems usually include performance feedback as part of the intervention package. However, there is no experimental evidence to suggest that feedback has any functional effect on work performance above and beyond the effects of the incentive systems. It may be that incentive systems have such powerful effects on work behavior that the additional contingencies provided by a feedback system are unnecessary. The present laboratory study investigated the supplemental effects of feedback on work performance under a monetary incentive system. Four subjects were hired to work seven hours a day for four and a half weeks. The experimental work task was a simulation of a proof operator’s job at a bank and involved typing dollar values of “checks” into a computer. Subjects were paid a base salary per session plus incentive money for performance above a criterion. The main dependent variable was the number of correctly completed checks per session. The amount of time off task and rate of responding were also investigated. Subjects were exposed to an ABA experimental design involving; (A) the monetary incentive system without performance feedback, (B) the incentive system with performance feedback, and (A) return to the incentive system without performance feedback. The introduction of feedback resulted in small to moderate performance improvements in two of the four subjects. Possible reasons for the small and inconsistent effects were explored with special attention paid to the functional role of feedback and monetary incentives. It was proposed that small amounts of incentive money and performance feedback may not improve productivity in the absence of other stimulus events inherent in real organizational settings, such as the possibility for pay raises, promotions, and/or the threat of being fired. These variables may have function-altering effects on incentive money and performance feedback. Future laboratory simulations might experimentally manipulate these variables to further investigate the efficacy of monetary incentive systems. / Graduate

Magister Commercii - MCom / Increasingly, organisations are realising that they have to establish an equitable balance between the employee’s contribution to the organisation and the organisation’s contribution to the employee. Establishing this balance is one of the main reasons to reward and recognise employees. Organisations that follow a strategic approach to creating this balance focus on the three main components of a reward system, which includes, compensation, benefits and recognition (Deeprose, 1994). Studies that have been conducted on the topic indicates that the most common problem in organisations today is that they miss the important component of recognition, which is the low-cost, high-return ingredient to a well-balanced reward system. A key focus of recognition is to make employees feel appreciated and valued (Sarvadi, 2005). Research has proven that employees who get recognised tend to have higher self-esteem, more confidence, more willingness to take on new challenges and more eagerness to be innovative (Mason, 2001). The aim of this study is to investigate whether rewards and recognition has an impact on employee motivation. A biographical and Work Motivation Questionnaire was administered to respondents (De Beer, 1987). The sample group (N= 184) consists of male and female employees on post-grade levels 5 to 12. The results of the research indicated that there is a positive relationship between rewards, recognition and motivation. The results also revealed that women, and employees from non-white racial backgrounds experienced lower levels of rewards, recognition and motivation. Future research on the latter issues could yield interesting insights into the different factors that motivate employees. Notwithstanding the insights derived from the current research, results need to be interpreted with caution since a convenience sample was used, thereby restricting the generalisability to the wider population. / South Africa