CHapter 5 alternatives To Incentive Controls Flashcards
Types of Controls
Results Control
Action Controls
Personnel Controls
Cultural Controls
Types of Action controls
- Behavioral constraints
- Preaction reviews
- Action accountability
- Redundancy
Behavioral constraints (action control)
Negative form of action control.
- Make it impossible for employees to do things that should be done.
- Physical constraints. Ex.:
- Administrative constraints: limits on an employee’s abilities to perform all or a portion of specific acts. Ex.:
- Separation of duties: divide up tasks so that it is impossible for one person to complete the task alone Ex.:
Preaction reviews
Action plans of the employees are controlled.
- Actions can be approved or disapproved by reviewers. - Ex.: Budgeting preview
Action accountability
Accountable actions can be communicated administratively or socially
- Administratively: work rules, procedures, company codes of conduct
- Rules in writing, training to reinforce rules (e.g., McDonalds, retailers)
- Socially: actions that involve professional judgment.
- Post audits in capital budgeting, peer reviews of auditors, lawyers etc.
Prof. Dr. Markus C. Arnold ・ Performance Measurement, Evaluation an
Redundancy (action control)
Usually expensive
Basic purpose of personnel controls
- Help ensure that each employee understands what the organization wants.
- Help ensure that employees are able to do a good job.
- Increase the likelihood that employees will engage in self-monitoring (self-control, intrinsic motivation, ethics, etc.)
Methods of personnel controls
Selection and placement of employees
Training
Job design and provision of necessary resources
Ways of cultural controls
-Written or unwritten rules
Norm and values
shared values, ideologies, attitudes
Codes of conduct
Group rewards
Advantages of personnel and cultural controls
usable in almost every setting, produce fewer harmful
side effects, can be economically beneficial.
Rotten Egg
Individual employees can infect others if they don’t follow the culture