Award for the Best Cornell Quarterly Article in 2002

[Excerpt] I am pleased to announce that the following article has been named Cornell Quarterly article of the year for 2002 (it appeared in the August 2002 issue): "Assessing the Profitability of Premium Players," by Anthony Lucas, Jim Kilby, and Jocelina Santos

An Empirical Examination of the Impacts from Termination of a Performance-Based Incentive Plan

This paper reports on the financial impacts from the termination of a pay for performance plan for the salesforce at a retail establishment. Using monthly panel data spanning more than eight years for 15 outlets of a major retailer, this study documents that store-level sales and operating profits decrease after the incentive plan is terminated. Individual performance data are then investigated to help identify the role of effort and selection effects in explaining the documented decrease. The analysis of the individual employee sales data reveals that virtually all of the declining store level sales can be explained by selection effects.

A Field Study of the Impact of a Performance-Based Incentive Plan

Much management accounting research focuses on design of incentive compensation contracts. A basic assumption in these contracts is that performance-based incentives improve employee performance. This paper reports on a field test of the multi-period incentive effects of a performance-based compensation plan on the sales of a retail establishment. Analysis of panel data for 15 retail outlets over 66 months indicates a sales increase when the plan is implemented, an effect that persists and increases over time. Sales gains are significantly lower in the peak selling season when more temporary workers are employed.

Evaluating Form and Functionality of Pay-For-Performance Plans: The Relative Incentive and Sorting Effects of Merit Pay, Bonuses, and Long-Term Incentives

Using two-year longitudinal data from a large sample of US employees from a service-related organization, the present study investigates the relative effects of three forms of pay-for-performance plans on employees’ job performance (incentive effects) and voluntary turnover (sorting effects). The study differentiates between three forms of pay: merit pay, individual-based bonuses, and long-term incentives. By definition, these PFP plans have different structural elements that distinguish them from each other (i.e., pay plan form) and different characteristics (functionality), such as the degree to which pay and performance are linked and the size of the rewards, which can vary both within and across plan types. Our results provide evidence that merit raises have larger incentive and sorting effects than bonuses and long-term incentives in multi-PFP plan environments where the three PFP plans are operating simultaneously. Only merit pay has both incentive and sorting effects among the three PFP plans. The implications for the PFP-related theory, as well as for the design and implementation of PFP plans, are discussed.

Letter from the Editors

[Excerpt] The Editorial Team is proud to release this 2016 14th Annual Volume of the Cornell Real Estate Review. This year’s issue explores a wide range of topics, including the deployment of new technologies in multifamily properties, the effects of autonomous vehicles on real estate, and the continued ramifications of the housing crisis through the legal tactics of certain mortgage lenders. Also included, a recent repositioning project– the unique turnaround of a former casino hotel property in Reno, Nevada. Furthermore, this release includes a discussion of value-added multifamily investment strategy, an analysis of the impact of rapid transit on the residential market in Hudson County, New Jersey, and a summary of federal affordable housing incentive programs in the United States. This year’s Pathways features an interview with Toll Brothers Division President Karl Mistry (Baker ’04), and the Baker Viewpoint piece explores the concept of curtailment mortgages.

2016 Real Estate Industry Leader Profile: MaryAnne Gilmartin

[Excerpt] Cornell University and the Baker Program in Real Estate are pleased to announce the 2016 Real Estate Industry Leader Award recipient: MaryAnne Gilmartin, President & CEO of Forest City Ratner Companies. MaryAnne’s leadership in the real estate industry has made a powerful and positive impact on society as a driving force behind several of the highest-profile, largest-scale additions to the urban landscape of New York City.

An Empirical Analysis of Continuing Improvements Following the Implementation of a Performance-Based Compensation Plan

Performance improvements subsequent to the implementation of a pay-for-performance plan can result because more productive employees self-select into the firm (selection effect) and/or because employees allocate effort to become more effective (effort effect). We analyze individual performance data for 3,776 sales employees of a retail firm to evaluate these alternative sources of continuing performance improvement. The incentive plan helps the firm attract and retain more productive sales employees, and motivates these employees to further improve their productivity. In contrast, the less productive sales employees’ performance declines before they leave the firm.

Research on Behavioral Integrity: A Promising Construct for Positive Organizational Scholarship

Behavioral integrity (BI) is the perception that another person, group, or entity lives by his word—delivers on promises and enacts the same values he espouses. This construct is more basic than trust or justice, and is typically measured as the perceived pattern of alignment between words and deeds. Empirical studies have shown it to have powerful positive consequences for the attitudes and performance of followers, managers, and organizations, and also that BI moderates the impact of other leader behaviors on these outcomes. Only a few studies have examined antecedents, and fewer still have examined moderated antecedents. Although initial terrain has been sketched out by early studies, there is much yet to learn about the workings of this high-potential construct.