Performance measure aggregation – two action levels

Junwook Yoo () and Igor Semenenko ()
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Junwook Yoo: Sungkyunkwan University
Igor Semenenko: Acadia University

Economics Bulletin, 2021, vol. 41, issue 2, 564-572

Abstract: In practice, effort is often measured in two levels due to the simplicity. When employees' actions are restricted to two levels, this study shows that the basic measures can be aggregated into a one-dimensional sufficient aggregate without losing any information from the basic measures. The format of the one-dimensional sufficient aggregate is determined only by the statistical properties of the basic measures and the one-dimensional sufficient aggregate can be uniformly used regardless of organizational particulars. By using the one-dimensional sufficient aggregate, complexity of performance evaluation systems can be reduced and efficiency of motivating employees through performance evaluation can be substantially improved.

Keywords: aggregation; performance measures; sufficiency; performance evaluation (search for similar items in EconPapers)
JEL-codes: M1 (search for similar items in EconPapers)
Date: 2021-04-09
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