This dissertation investigates multi-period salesforce incentive contracting. The first chapter is an overview of the problems as well as the main findings. The second chapter continues with a review of the related literatures. The third and fourth chapters address a central question in salesforce contracting: how frequently should a firm compensate its sales agents over a long-term horizon? Agents can game the long-term contract by varying their effort levels dynamically over time, as discussed in Chapter 3, or by altering between a “bold" action and a “safe" action dynamically over time, as discussed in Chapter 4. Chapter 3 studies multi-period salesforce incentive provisions when agents are able to vary their demand-enhancing effort levels dynamically. I establish a stylized agency-theory model to analyze this central question. I consider salespeople's dynamic responses in exerting effort (often known as “gaming"). I find that long time horizon contracts weakly dominate short time horizon contracts, even though they enable gaming by the agent, because they allow compensation to be contingent on more extreme outcomes; this not only motivates the salesperson more, but also leads to lower expected payment to the salesperson. A counterintuitive observation that my analysis provides is that under the optimal long time horizon contract, the firm may find it optimal to induce the agent to not exert high effort in every period. This provides a rationale for effort exertion patterns that are often interpreted as suboptimal for the firm (e.g., exerting effort only in early periods, often called “giving up"; exerting effort only in later periods, often called “postponing effort"). I also discuss the implication of sales pull-in and push-out, and dependence of periods (through limited inventory) upon the structure of the optimal contracting. Chapter 4 examines multi-period salesforce incentive contracting, where sales agents can dynamically choose between a bold action with higher sales potential but also higher variance, and a safe action with limited sales potential but lower variance. I find that the contract format is determined by how much the firm wants later actions to depend on earlier outcomes. Making later actions independent of earlier demand outcomes reduces agents' gaming, but it also reduces an agent's incentive to take bold actions. When the two periods are independent, an extreme two-period contract with a hard-to-achieve quota, or a polarized two-period contract allowing agents to make up sales, can strictly dominate a period-by-period contract, because they induce more bold actions in earlier periods by making later actions dependent on earlier outcomes. However, when the two periods are dependent through a limited inventory to be sold across two periods, the period-by-period contract can strictly dominate the two-period contract, by allowing the principal more flexibility in adjusting the contract.

Thesis (Ph. D.)--University of Washington, 2002. / Vita. Includes bibliographical references (leaves 88-93).

Thesis (Ph. D.)--University of Texas at Austin, 2002. / Vita. Includes bibliographical references. Available also from UMI Company.

Newly listed firms have a short history of stock value, and may initially not rely on stock price information in incentive contracting as much as seasoned firms. In this thesis, I examine managerial incentive contracts in newly listed firms by comparing CEO compensation between IPO firms and seasoned firms. For IPOs listed on NYSE from 1993 to 2001, a matching sample of seasoned firms was obtained according to criteria in industry, size and book-to-market ratio. By examining the multi-dimensions of CEO incentives, including cash compensation, option grants, stock ownership, and dismissal for the first six years after listing, I document significant differences between IPOs and seasoned firms. I find that while the sensitivity of short-term incentive pay to shareholder return is lower in IPOs than in seasoned firms, long-term incentives from CEO stock ownership are significantly more important in newly listed firms. Moreover, although CEO turnover in an IPO firm is lower, it depends on both stock-price return and accounting performance. These IPO-seasoned differences diminish over time and disappear in three to five years. My findings suggest that to motivate the manager of a newly listed firm, the board avoids short-term uncertainty associated with new stocks while emphasizing the role of shareholder value in the long run. / published_or_final_version / Economics and Finance / Master / Master of Philosophy

This thesis consists of one literature review and three self-contained essays that discuss management transfers, work incentives and age structures in family firms. In the literature review, I summarize and structure recent studies on management transfer in family firms. The first essay focuses on the incentive effects of age structure in a single firm, and argues that compressed age structures are negatively related to firm performance, which provides a mechanism that causes the underperformance of dynastic management. In the second essay, I extend the single-firm analysis to a multi-firm scenario and find children prefer to work for their own family if the age gap between levels is large. Otherwise, they leave and work for other families. As a result, increased life expectancy leads to the separation between ownership and management, and family-managed firms have more compressed age structures than their professionally managed counterparts. In the third and final essay, I study the issue of self-enforcement in promotion tournaments and find organizations using rank-order contracts may still act opportunistically even when there exists no agency problem between owners and managers. Furthermore, both the wage-seniority profile and governance structure determine the credibility of rank-order contracts, which provides an alternative rationale for returns to seniority and underperformance of dynastic management.

This paper highlights the background and purpose of pay from the economic perspective as well as issues and concerns encountered by organizations when implementing the PRP (Performance-Related-Pay) scheme. Amongst the issues and concerns of implementing a PRP scheme, active participation of employees, a fair employees performance appraisal system and a constructive communication channel are some of the important criteria to be considered for an effective PRP scheme. / The paper also describes the advantages and disadvantages of PRP schemes for the consideration of readers. The research showed that the advantages of implementing a PRP scheme include productivity improvement and increases in employees motivation level. The disadvantages of such a scheme would be undue emphasis on individual performance and additional workload for the management. / It describes a competency model which may be replicated by organizations during the implementation of a PRP scheme. / Trade union leaders expressed their frustrations in terms of unwillingness of the employers to disclose financial information and the lack of fair and effective employees performance appraisal systems.This paper also includes PRP related cases established by the Malaysian Industrial Courts for the information of the readers. This paper does not provide any methodology for implementing PRP schemes. However, it offers readers some insights into PRP schemes for further research / Thesis (DBA(DoctorateofBusinessAdministration))--University of South Australia, 2006.

The chief purpose of this survey is to explore employee's perception and experience with Performance Pay and how they affect motivation in the workplace. / Thesis (DBA(DoctorateofBusinessAdministration))--University of South Australia, 2005.

Thesis (Ph. D.)--University of Washington, 1997. / Vita. Includes bibliographical references (leaves [92]-95).

Thesis (Ph. D.)--University of Hong Kong, 2000. / Includes bibliographical references (leaves 214-224).

Thesis (Ph. D.)--University of Chicago, Dept. of Economics, March 2000. / Includes bibliographical references. Also available on the Internet.