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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title Management Fashion Pay-for-Performance
Organization Unit
  • Margit Osterloh
  • Katja Rost
  • English
Series Name
Number 230507
Date 2009
Date Annual Report 2009
Abstract Text We show theoretically and empirically that Pay-for-Performance, like many management fashions, has not achieved its intended aim. Our research focuses on previous empirical studies that examine the relation between variable executive pay and firm performance on various different dates. Our results indicate that a variable CEO income contributes very little to the increase of the firm’s performance, and that CEO salary and firm performance are not linked. The example of Pay-for-Performance shows that in the long run, many management fashions do not solve the problems that they promise to solve.
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