Incentivizing the Owner: Why Family Firms offer Pay-for-Performance Contracts to their CEOs

2019 ◽  
Author(s):  
Laura Abrardi ◽  
Laura Rondi
Keyword(s):  
Family Firms ◽  
Pay For Performance ◽  
Performance Contracts

CEO Compensation in Private Family Firms

2012 ◽  
Vol 26 (2) ◽  
pp. 140-160 ◽  
Author(s):  
Anneleen Michiels ◽  
Wim Voordeckers ◽  
Nadine Lybaert ◽  
Tensie Steijvers
Keyword(s):  
Firm Performance ◽  
Empirical Evidence ◽  
Significant Role ◽  
Ceo Compensation ◽  
Family Firms ◽  
Pay For Performance ◽  
Objective Performance ◽  
Privately Held

Although classical agency theorists claim that pay-for-performance is not relevant in the context of private family firms, the authors provide empirical evidence of the opposite, using a sample of 529 privately held U.S. family firms. The results suggest that objective performance-based measures play a significant role in CEO compensation. Additionally, the authors find that in private family firms CEO compensation is more responsive to firm performance in firms with low ownership dispersion and in the controlling-owner stage. Furthermore, the positive pay-for-performance relation is slightly stronger for nonfamily CEOs than for family CEOs.

scholarly journals Recruitment, Effort, and Retention Effects of Performance Contracts for Civil Servants: Experimental Evidence from Rwandan Primary Schools

2021 ◽  
Vol 111 (7) ◽  
pp. 2213-2246
Author(s):  
Clare Leaver ◽  
Owen Ozier ◽  
Pieter Serneels ◽  
Andrew Zeitlin
Keyword(s):  
Primary Schools ◽  
Pay For Performance ◽  
School Level ◽  
Incentive Compatible ◽  
Performance Contracts ◽  
Fixed Wage ◽  
Standard Deviations ◽  
Pupil Learning ◽  
Effort Effect ◽  
Wage Contract

This paper reports on a two-tiered experiment designed to separately identify the selection and effort margins of pay for performance (P4P). At the recruitment stage, teacher labor markets were randomly assigned to a “pay-for-percentile” or fixed-wage contract. Once recruits were placed, an unexpected, incentive-compatible, school-level re-randomization was performed so that some teachers who applied for a fixed-wage contract ended up being paid by P4P, and vice versa. By the second year of the study, the within-year effort effect of P4P was 0.16 standard deviations of pupil learning, with the total effect rising to 0.20 standard deviations after allowing for selection. (JEL C93, I21, J23, J33, J41, J45, O15)

Cost, value, and policy in quality: Evolving relationship of payers and providers.

2014 ◽  
Vol 32 (30_suppl) ◽  
pp. 44-44
Author(s):  
Diane Denny ◽  
Caitlin Keenan
Keyword(s):  
Real Time ◽  
Performance Metrics ◽  
Pay For Performance ◽  
Tracking System ◽  
Performance Standards ◽  
Site Quality ◽  
Central Repository ◽  
Performance Contracts ◽  
Monitoring Process ◽  
Executive Teams

44 Background: Cancer Treatment Centers of America (CTCA), a network of five hospitals, has multiple pay for performance contracts. Some apply to all hospitals, while others are unique to individual facilities. While many metrics are managed by site, some metrics are collected and measured centrally by corporate. Varying levels of oversight were required from site quality teams, executive teams and externally-facing corporate departments. In order to coordinate these efforts, CTCA implemented a real-time tracking system for monitoring pay for performance metrics. Methods: CTCA’s corporate Quality department designed a central repository for monitoring metrics that is populated monthly using customized workbooks submitted from each site. The central repository compiles monthly data and displays it in several formats broken down by timeframe, site and contract. The repository incorporates features allowing easy sharing and data accuracy. An accompanying process for collecting data was created to ensure timely, efficient updates to the repository. Results: The monthly monitoring process was implemented in January 2014 and continues to operate successfully. For one enterprise-wide contract cycle closing on April 31, CTCA met requirements and outperformed the contract-specified goal for each by an average of 19.8%. Pre-implementation, metrics were monitored quarterly. Although two metrics showed a small (<2.5%) decrease in average performance, given the intensified focus, the remaining metrics showed an average 7.95% improvement in performance during the second six months with monthly monitoring. Metrics associated with the remaining contracts are on track to meet or exceed specified performance standards. Conclusions: The new tool and monthly reporting process successfully monitored pay for performance metrics at CTCA. Most importantly, the system allowed for close to real-time assessment and therefore promoted ongoing intervention if warranted. The repository created a single source of data sharing and visibility for these important elements of performance. As CTCA continues to participate in pay for performance activities, this method will be adapted to accommodate more contracts and metrics.

Recruitment, Effort, and Retention Effects of Performance Contracts for Civil Servants: Experimental Evidence from Rwandan Primary Schools

2020 ◽  
Author(s):  
Clare Leaver ◽  
Owen Ozier ◽  
Pieter Serneels ◽  
Andrew Zeitlin
Keyword(s):  
Primary Schools ◽  
Pay For Performance ◽  
School Level ◽  
Incentive Compatible ◽  
Performance Contracts ◽  
Fixed Wage ◽  
Standard Deviations ◽  
Pupil Learning ◽  
Effort Effect ◽  
Wage Contract

This paper reports on a two-tiered experiment designed to separately identify the selection and effort margins of pay-for-performance (P4P). At the recruitment stage, teacher labor markets were randomly assigned to a pay-for-percentile or fixed-wage contract. Once recruits were placed, an unexpected, incentive-compatible, school-level re-randomization was performed, so that some teachers who applied for a fixed-wage contract ended up being paid by P4P, and vice versa. By the second year of the study, the within-year effort effect of P4P was 0.16 standard deviations of pupil learning, with the total effect rising to 0.20 standard deviations after allowing for selection.

scholarly journals Performance Pay in Insurance Markets: Evidence from Medicare

2021 ◽  
pp. 1-45
Author(s):  
Michele Fioretti ◽  
Hongming Wang
Keyword(s):  
Social Services ◽  
Pay For Performance ◽  
Public Procurement ◽  
Performance Pay ◽  
Insurance Markets ◽  
Medicare Advantage ◽  
Performance Contracts ◽  
Bonus Payments ◽  
Quality Rating ◽  
Firm Responses

Abstract Public procurement bodies increasingly resort to pay-for-performance contracts to promote efficient spending. We show that firm responses to pay-for-performance can widen the inequality in accessing social services. Focusing on the quality bonus payment initiative in Medicare Advantage, we find that higher quality-rated insurers responded to bonus payments by selecting healthier enrollees with premium differences across counties. Selection is profitable because the quality rating fails to adjust for differences in enrollee health. Selection inflated the bonus payments and shifted the supply of highrated insurance to the healthiest counties, reducing access to lower-priced, higher-rated insurance in the riskiest counties.

Analysis of Medicare Pay-for-Performance Contracts

2016 ◽  
Author(s):  
Hamsa Bastani ◽  
Mohsen Bayati ◽  
Mark Braverman ◽  
Ramesh Johari
Keyword(s):  
Pay For Performance ◽  
Performance Contracts
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