Topic 7 - Performance Measurement and Incentives

1. Read Nagar (2002) and answer the following questions:

 What research question does this study investigate?
 What is the motivation/reason to investigate this question?
 What methods are used to investigate this question?
 What are the key findings of this study?

2. Read Bonner and Sprinkle (2000):

 What are the four facets of the effort construct? How can you distinguish and
measure each of them?
 What are the economic and psychology theories that explain how financial
incentives affect effort? What are the similarities and differences between these
theories?
 Search the meaning of “moderating variables” (in the paper and through other
channels). Name five moderating variables that are relevant to the link between
financial incentives and tasks performance.

3. Read Banker et al. (2000):

 Name three examples for financial performance measures, and three for non-
financial performance measures.
 In the field site used in this paper, how are the non-financial performance
measures connected to the performance of the hotels?
 Who can benefit from the findings of this study and how?
Topic 8 - Citibank
1. Classify the following items based on the four perspectives of BSC. Which of these
measures are lagging measures? Which are leading measures?
(1) ROI; (2) Employee innovation; (3) Market share; (4) Operating income; (5) Useful
life of equipment; (6) Number experts recruited; (7) Defect rates of materials; (8)
Employee engagement; (9) Procurement costs; (10) Customer satisfaction; (11) Defect
rates of materials; (12) Customer returning rate

2. Complete the following chart to show the different perspectives in Citibank’s strategy
map and their connections:

3. How would you evaluate James’ performance? Would you give him the bonus? Why or
why not?

4. Do you think financial bonus is a good reward for managers and employees in Citibank?
How does financial bonus motivate them to achieve the goal of the organization? Does
the current system have any limitations?

5. Besides financial bonus, what other kinds of rewards can be used to motivate
managers/employees?
Topic 9 – Wells Fargo
1. What, in your view, were the causes of the misconduct at Wells Fargo? Who should be
responsible for the misconduct (e.g., employees? branch managers? senior managers?
board of directors?) and why?
2. What were the failures of control systems that allowed the dysfunctional behaviors to
continue unchecked?
3. How and when should the board have intervened? Do you think they had sufficient
information that would indicate the existence and the extent of the problem?
4. If you were asked to consult on how to remedy this situation, what would be the actions
you would assign higher priority?
Topic 10 – Handelsbanken
1. How would you summarize the culture and values of Handelsbanken? How does
Handelsbanken’s culture and values link to its organizational goal?

2. How would you describe Handelsbanken’s organizational structure (e.g.,

decentralization, compensation, monitoring, etc.)?

3. Do you think the type of compensation that Handelsbanken offers to its employee will
work in other companies? Why or why not? Why does it work particularly well in
Handelsbanken?

4. Imagine you are a HR manager of Handelsbanken, what kind of questions would you ask
the job candidates? Based on Handelsbanken’s organizational structure and corporate
culture, what kind of people would you want to recruit and what kind of people would
you avoid?

5. Compare Wells Fargo and Handelsbanken, how are they different in terms of corporate
culture?