Subjectivity in Compensation Contracting

AAA Management Accounting Section (MAS) 2006 Meeting Paper

Journal of Accounting Literature, Vol. 27, pp. 1-32, 2008

40 Pages Posted: 1 Aug 2005 Last revised: 8 Jul 2009

See all articles by Jasmijn C. Bol

Jasmijn C. Bol

Tulane University - A.B. Freeman School of Business

Date Written: December 1, 2008

Abstract

This paper examines the role of subjectivity in compensation contracting. The main focus of the compensation contracting literature has traditionally been on explicit compensation contracts of workers whose individual contribution is relatively easy to observe. These studies have provided important insights into incentive provision and contract design. Although many of these insights remain valid when compensation contracts include subjectivity, supervisor discretion introduces many additional issues. This paper summarizes and synthesizes extant research on subjectivity in compensation contracting, and provides new insights that will help stimulate future research.

Keywords: supervisor discretion, subjectivity, subjective performance evaluation

JEL Classification: M41, J33

Suggested Citation

Bol, Jasmijn C., Subjectivity in Compensation Contracting (December 1, 2008). AAA Management Accounting Section (MAS) 2006 Meeting Paper, Journal of Accounting Literature, Vol. 27, pp. 1-32, 2008, Available at SSRN: https://ssrn.com/abstract=771565

Jasmijn C. Bol (Contact Author)

Tulane University - A.B. Freeman School of Business ( email )

7 McAlister Drive
New Orleans, LA 70118
United States

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