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1、Chapter 2:Results ControlsResults controlsInvolves rewarding individuals for generating good results (or punishing them for poor results)Results accountabilityIt influences actions because it causes employees to be concerned about the consequences of the actions they takeHowever, employees actions a
2、re not constrainedOn the contrary, employees are empowered to take whatever actions they believe will best produce the desired resultsKey results control elementsDefining the performance dimensionsWhat you measure is what you get; hence,If not congruent with the organizations objectives, the control
3、s will actually encourage employees to do the wrong things!Measuring performance on these dimensionsObjective financial market-based: for example, stock price accounting-based: for example, return on assets non-financial: for example, market share, customer satisfactionSubjective: for example, manag
4、erial characteristics (“being a team player”)Setting performance targetsMotivational effectsProviding rewards (or punishments)“Incentives” monetary and non-monetaryResults controls work best only when all ofthe following three conditions are present:Superiors/managers must know what results are desi
5、red in the areas being controlledThe individuals whose behaviors are being controlled must have significant influence on the results in the desired performance dimensionsSuperiors/managers must be able to measure the results effectivelyConditions for effective results controlThe person whose behavio
6、rs are controlled must be able to affect the results in a material way in a given time spanControllability principleResults controls are useful only to the extent that they provide information about the desirability ofthe actions that were takenIf the results are uncontrollable, the controls tell us
7、 little about the actions that were taken:Good actions will not necessarily produce good resultsBad actions may similarly be obscuredAbility to influence resultsThe effectiveness of results measures must be judged by their .Ability to evoke the desired behaviorsMeasurement propertiesCongruenceContro
8、llabilityPrecisionObjectivityTimelinessUnderstandabilityCost efficiencyAbility to measure results effectivelyBehavior can be influencedwhile allowing significant autonomyThey yield greater employee commitment and motivationThey are often “inexpensive”For example, performance measures are often alrea
9、dy collected for reasons not directly related to managementcontrol (e.g., financial reporting)Often less-than-perfect indicatorsof whether good actions have been takenThey shift risk to employees (due to uncontrollable factors); hence, they often require a risk premium for risk averse employeesSometimes conflicting functions:Motivation to a
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