Pay for performance in a management control context
Degree GrantorUniversity of Canterbury
Degree NameMaster of Commerce
Otley et al. (1995) allege management accounting has become narrow in its focus and believe research is needed in broader areas. The areas of performance measurement and control have been suggested as a topic which warrants further management accounting research (Otley et al., 1995). Organisations are facing a very different environment to that of 20 years ago. Management accounting has failed to keep pace with these changes when designing management control systems (Otley, et al., 1995). Furthermore:
"Resesarch from the UK and USA has shown that [performance measurement and control] is an area financial directors are the least satisfied with" (Haq, 1995, p. 20).
The culture of a country must be considered when developing a compensation system. However, there has been a dearth of research on the topic of pay for performance in a New Zealand context and the decentralisation of the remuneration functions to individual business units. Consequently a case study was conducted at Business Unit A of the Christchurch City Council. This examined the process followed by Business Unit A to develop and implement a pay for performance system for their Unit. Prior to this research, these aspects of design and implementation have not been addressed in a New Zealand context. Despite the human bias possible when conducting case studies and other limitations, the body of knowledge surrounding pay for performance has been expanded and areas for future research recommended.