EconPapers    
Economics at your fingertips  
 

The lack of controllability of EVA explains its decline a field study

François Larmande and Jean-Pierre Ponssard
Additional contact information
François Larmande: EM - EMLyon Business School

Working Papers from HAL

Abstract: This paper investigates the properties of EVA compensation schemes, which were considered as a major managerial innovation of the 90's. The analysis is carried on in the framework of contract theory and based on a six year longitudinal case study. Such schemes induce highly volatile bonuses compared to more traditional ones. This is interpreted as a loss of controllability, where controllability is defined as the controllability of their performance measured by managers. The role of the target setting, based on external standards, and the absence of renegotiation are of particular significance in explaining this loss. This analysis explains the difficulties encountered in the implementation of these schemes and their relative decline.

Date: 2007
Note: View the original document on HAL open archive server: https://hal.science/hal-00243065
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://hal.science/hal-00243065/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-00243065

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2025-03-19
Handle: RePEc:hal:wpaper:hal-00243065