Incentivising through EVA and other Short Term Performance Metrics - Exploring other Neglected Paradigms

Abstract

The emphasis in theory and practice of using EVA and other short-term performance measures to incentivise senior management and management group alone arouses the inner curiosity for this thesis. If any thing else, it is the belief that all members of the organisation should be compensated for the good performance of organisation members. This research investigated whether incentive bonus systems linked to EVA and other short-term mimetic isomorphs have addressed the needs of the ordinary worker. That is, the thesis attempts to find out whether incentive bonus systems as being applied by companies can be considered fair and equitable, from the point of view of the rank-and-file employees. The term rank-and-file refers to the generality of workers on the shop floor. It does not in any way mean blue collar or white collar workers. A graphical conceptual model was developed and tested in the study. Theoretically, the research is anchored within the remit of behavioural accounting research. Ensuing empirical results obtained from companies’ annual reports through the use of content analysis method showed that the ways EVA and other mimetic variants are being selectively applied or used to incentivise organisation members are, in most cases, considered unfair to the rank-and-file or the generality of workers.