Between May and December 2008, Western Digital, one of the largest computer hard disk manufacturers in the world, experienced a severe shock*. Its stock price fell from $37.53 to $11.45. In 2009, the company reported in its proxy statement that it used discretion, as opposed to objective performance metrics, for evaluating its CEO. In 2008, it had not used […]
Incentive schemes, which rely on monitoring technologies, are becoming increasing popular as a means to foster productivity in public sector organisations. A legitimate question to ask is whether they improve service delivery or, instead, they force already motivated workers to waste time dealing with monitoring/reporting systems.
Two examples help us understand the kind of situations we have in mind. First […]
Something strange is happening to leadership at work. The old truths don’t seem to work anymore. Today’s leaders are not really sure which way to go. It used to be seen that every ‘leader’ needed ‘followers’, a hierarchy where people saw their future in the organisation and compliance was the order of the day. When insecurity crept in, […]
Writing effective managerial contracts is far from easy. Compensation committees must allocate incentives where they are most needed, while simultaneously being careful not to induce behaviours that would be detrimental to shareholders or imposing an inordinate amount of risk on managers. In a recent paper, I specifically focus on this second problem, that of reducing the risk borne by […]