Toward a business-to-business channel incentives classification scheme

A recent focus on intermediary compensation underscores the need to organize the many complex incentives used by channel practitioners. Employing a grounded theory methodology, a channel incentives classification scheme is induced from 170 unique channel incentives used in 59 high technology suppliers’ channel programs. The incentives are organized into 16 subcategories and 5 major categories: Credible Channel Policies, Market Development Support, Supplemental Contact, High-Powered Incentives, and End-User Encouragements. Each incentive subcategory is discussed as a means of controlling reseller behaviors. Also, the conditions that give rise to the implementation of incentives are investigated through four testable research propositions.

Channel incentives as unilateral and bilateral governance processes

The authors investigate channel incentives as extra-contractual governance processes that maintain and extend marketing channel relationships. More specifically, instrumental incentives are monetary-based payments made by a manufacturer in a unilateral channel arrangement to motivate distributor compliance, while equity incentives are bilateral expectations of fair treatment that motivate both parties to continue to cooperate with one another. A model of the antecedents and performance consequences of channel incentives is conceptualized and tested on 314 marketing channel relationships using a structural equation modeling methodology. The findings support the conceptual model and suggest that unique facets of the channel relationship explain the type of incentive mechanism in use.

CEO compensation, option incentives and information disclosure

This paper examines the impact of information disclosure on the valuation of CEO options and the incentives created by those options. Prior executive compensation research in the US has made assumptions about key input variables that can affect the calculation of option values and financial incentives. Accordingly, biases may have ensued due to incomplete information disclosure about noncurrent option grants. Using new data on a sample of UK CEOs, we value executive option holdings and incentives for the first time and estimate the levels of distortion created by the less than complete US-style disclosure requirements. We also investigate the levels of distortion in the UK for the minority of companies that choose to reveal only partial information. Our results suggest that there have to date been few economic biases arising from less than complete information disclosure. Furthermore, we demonstrate that researchers using US data, who made reasonable assumptions about the inputs of noncurrent option grants, are unlikely to have made significant errors when calculating CEO financial incentives or option wealth. However, the recent downturn in the US stock market could result in the same assumptions, producing exaggerated incentive estimates in the future.

Corporate boards and incentives: empirical evidence from the UK in 1935

We investigate boardroom governance using UK historical data for 1935. We demonstrate that there is a negative relationship between risk and incentives in this year. Prior research has produced anomalous results (Prendergast, 2002). Second, we show that average (median) board ownership of ordinary shares is about 7.95% (2.88%). Heuristically this figure is less than previously reported estimates for the US also using 1935 data. Finally, we show the phenomenon of multiple board membership. UK directors in 1935 hold many directorships – sometimes exceeding 10 concurrent memberships.

Prepaid monetary incentives on mail survey response

Increasing mail survey response using monetary incentives is a proven, but not always cost-effective, method in every population. This paper tackles the questions of whether it is worth using monetary incentives and the size of the inducement by testing a regression model of the impact of prepaid monetary incentives on response rates in consumer and organizational mail surveys. The results support their use and show that the inducement value makes a significant impact on the effect size. Importantly, no significant differences were found between consumer and organizational populations.

The optimum prepaid monetary incentives for mail surveys

Increasing mail-survey response using monetary incentives is a proven, but not always cost-effective method in every population. This paper tackles the questions of whether it is worth using monetary incentives and the size of the inducement by testing a logit model of the impact of prepaid monetary incentives on response rates in consumer and organizational mail surveys. The results support their use and show that the inducement value makes a significant impact on the effect size. Importantly, no significant differences were found between consumer and organizational populations. A cost-benefit model is developed to estimate the optimum incentive when attempting to minimize overall survey costs for a given sample size. © 2006 Operational Research Society Ltd. All rights reserved.

Prepaid monetary incentives on mail survey response

Increasing mail survey response using monetary incentives is a proven, but not always cost-effective, method in every population. This paper tackles the questions of whether it is worth using monetary incentives and the size of the inducement by testing a regression model of the impact of prepaid monetary incentives on response rates in consumer and organizational mail surveys. The results support their use and show that the inducement value makes a significant impact on the effect size. Importantly, no significant differences were found between consumer and organizational populations.

The 'Healthy Passport' intervention with older people in an English urban environment:effects of incentives and peer-group organisers in promoting healthy living

This paper reports the evaluation of the effectiveness of incentives (viz. points and prizes) and of peer-group organisers ('older people's champions') in the outcomes of a health-improvement programme for people aged 50 + years in a multi-ethnic district of the West Midlands, England. Health promotion activities Were provided, and adherence, outcome variables and barriers to adherence were assessed over six months, using a `passport' format. Those aged in the fifties and of Asian origin Were under represented, but people of Afro-Caribbean origin were well represented and proportionately most likely to stay in the project. Those of greater age and With more illness were most likely to drop out. There were significant improvements in exercise, diet and the uptake of influenza vaccines and eyesight tests, but slighter improvements in wellbeing. Positive outcomes related to the incentives and to liking the format. The number of reported barriers was associated with lower involvement and lack of change, as was finding activities too difficult, the level of understanding, and transport and mobility problems, but when these were controlled, age did not predict involvement. Enjoying the scheme was related to positive changes, and this was associated with support from the older people's champions.

Angel grants employees their wish – for time off in return for high performance:new breed of incentives based on what staff really want from their employer

Purpose – Describes a new breed of HR strategies that encourage employee involvement and commitment as part of high-performance working (HPW). Design/methodology/approach – Focuses on managing employee attitudes and skills through careful attention to leadership, reward and job-design policies. Highlights the differences between people's formal employment contracts and their less formal “psychological contracts”, and emphasizes the importance of the latter. Provides a case study of UK recruitment consultancy Angel Services Group Ltd, which allows staff who meet their daily targets to go home an hour early. Findings – Urges companies to have processes in place to understand the needs of individual employees. This can be done through leadership policies that require all supervisors and managers not only to manage their staff but also to know them as people. Practical implications – Emphasizes that organizations need to see HPW initiatives as part of the normal way of managing people, and not as “flavour of the month”. Originality/value – Outlines a wide range of initiatives that could help organizations to gain their employees' commitment.

When do incentives work in channels of distribution?

The incentive dilemma refers to a situation in which incentives are offered but do not work as intended. The authors suggest that, in an interorganizational context, whether a principal-provided incentive works is a function of how it is evaluated by an agent: for its contribution to the agent's bottom line (instrumental evaluation) and for the extent it is strategically aligned with the agent's direction (congruence evaluation). To further understand when incentives work, the influence of two key contextual variables-industry volatility and dependence-are examined. A field study featuring 57 semi-structured depth interviews and 386 responses from twin surveys in the information technology and brewing industries provide data for hypothesis testing. When and whether incentives work is demonstrated by certain conditions under which the agent's evaluation of an incentive has positive or negative effects on its compliance and active representation. Further, some outcomes are reversed in the high volatility condition. © 2013 Academy of Marketing Science.

Person-organization fit and incentives:a causal test

We investigate the effects of organizational culture and personal values on performance under individual and team contest incentives. We develop a model of regard for others and in-group favoritism that predicts interaction effects between organizational values and personal values in contest games. These predictions are tested in a computerized lab experiment with exogenous control of both organizational values and incentives. In line with our theoretical model we find that prosocial (proself) orientated subjects exert more (less) effort in team contests in the primed prosocial organizational values condition, relative to the neutrally primed baseline condition. Further, when the prosocial organizational values are combined with individual contest incentives, prosocial subjects no longer outperform their proself counterparts. These findings provide a first, affirmative, causal test of person-organization fit theory. They also suggest the importance of a 'triple-fit' between personal preferences, organizational values and incentive mechanisms for prosocially orientated individuals.

Tax incentives applied against externalities: International examples of fat tax and carbon tax

This study assesses the Pigou taxes introduced as a response to negative externalities in practice. The authors analyze the international practice and effectiveness of taxation on food products harmful to health and on carbon emissions harmful to the environment and, in relation to these two types of taxes, the focus is on the opportunities and the factors reducing efficiency.

Using Tax Incentives Reduces Construction Costs

Rehabilitation tax credits can save developers a significant amount of money. The author discusses the tests used to lower overall tax liability by renovating older structures.

Essays on the Role of Government Incentives in the Private Provision of Social Goods

The economic rationale for public intervention into private markets through price mechanisms is twofold: to correct market failures and to redistribute resources. Financial incentives are one such price mechanism. In this dissertation, I specifically address the role of financial incentives in providing social goods in two separate contexts: a redistributive policy that enables low income working families to access affordable childcare in the US and an experimental pay-for-performance intervention to improve population health outcomes in rural India. In the first two papers, I investigate the effects of government incentives for providing grandchild care on grandmothers’ short- and long-term outcomes. In the third paper, coauthored with Manoj Mohanan, Grant Miller, Katherine Donato, and Marcos Vera-Hernandez, we use an experimental framework to consider the the effects of financial incentives in improving maternal and child health outcomes in the Indian state of Karnataka.

Grandmothers provide a significant amount of childcare in the US, but little is known about how this informal, and often uncompensated, time transfer impacts their economic and health outcomes. The first two chapters of this dissertation address the impact of federally funded, state-level means-tested programs that compensate grandparent-provided childcare on the retirement security of older women, an economically vulnerable group of considerable policy interest. I use the variation in the availability and generosity of childcare subsidies to model the effect of government payments for grandchild care on grandmothers’ time use, income, earnings, interfamily transfers, and health outcomes. After establishing that more generous government payments induce grandmothers to provide more hours of childcare, I find that grandmothers adjust their behavior by reducing their formal labor supply and earnings. Grandmothers make up for lost earnings by claiming Social Security earlier, increasing their reliance on Supplemental Security Income (SSI) and reducing financial transfers to their children. While the policy does not appear to negatively impact grandmothers’ immediate economic well-being, there are significant costs to the state, in terms of both up-front costs for care payments and long-term costs as a result of grandmothers’ increased reliance on social insurance.

The final paper, The Role of Non-Cognitive Traits in Response to Financial Incentives: Evidence from a Randomized Control Trial of Obstetrics Care Providers in India, is coauthored with Manoj Mohanan, Grant Miller, Katherine Donato and Marcos Vera-Hernandez. We report the results from “Improving Maternal and Child Health in India: Evaluating Demand and Supply Side Strategies” (IMACHINE), a randomized controlled experiment designed to test the effectiveness of supply-side incentives for private obstetrics care providers in rural Karnataka, India. In particular, the experimental design compares two different types of incentives: (1) those based on the quality of inputs providers offer their patients (inputs contracts) and (2) those based on the reduction of incidence of four adverse maternal and neonatal health outcomes (outcomes contracts). Along with studying the relative effectiveness of the different financial incentives, we also investigate the role of provider characteristics, preferences, expectations and non-cognitive traits in mitigating the effects of incentive contracts.

We find that both contract types input incentive contracts reduce rates of post-partum hemorrhage, the leading cause of maternal mortality in India by about 20%. We also find some evidence of multitasking as output incentive contract providers reduce the level of postnatal newborn care received by their patients. We find that patient health improvements in response to both contract types are concentrated among higher trained providers. We find improvements in patient care to be concentrated among the lower trained providers. Contrary to our expectations, we also find improvements in patient health to be concentrated among the most risk averse providers, while more patient providers respond relatively little to the incentives, and these difference are most evident in the outputs contract arm. The results are opposite for patient care outcomes; risk averse providers have significantly lower rates of patient care and more patient providers provide higher quality care in response to the outputs contract. We find evidence that overconfidence among providers about their expectations about possible improvements reduces the effectiveness of both types of incentive contracts for improving both patient outcomes and patient care. Finally, we find no heterogeneous response based on non-cognitive traits.