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2020/2021  KAN-CASCO1004U  Performance Measurement and Incentives

English Title
Performance Measurement and Incentives

Course information

Language English
Course ECTS 7.5 ECTS
Type Mandatory
Level Full Degree Master
Duration One Semester
Start time of the course Spring
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Christian Huber - Department of Operations Management (OM)
Main academic disciplines
  • Organisation
  • Business psychology
  • Economics
Teaching methods
  • Face-to-face teaching
Last updated on 06-01-2021

Relevant links

Learning objectives
The aim of the course is to strengthen the student’s competence to design performance measurement and incentive systems in organizations. By building on the student’s knowledge of accounting as a tool for strategy implementation (obtained at the course Accounting and Control, 1. semester) this course advances the discussion of performance measurement, target setting, evaluation and compensation which are all key issues in coordination and motivation of employees in organizations.

At the exam the students must be able to:
- Explain, structure and combine the various concepts, issues and models related to performance information, coordination and motivation introduced at the course.
- Identify and analyze design problems related to performance management systems and processes in organizations by using the concepts and models from the course
- Critically reflect upon various design solutions proposed by theories and models applied at the course in terms of their value and relevance in specific organizational settings
Prerequisites for registering for the exam (activities during the teaching period)
Number of compulsory activities which must be approved (see s. 13 of the Programme Regulations): 1
Compulsory home assignments
The student must get 1 out of 2 assignments/activities approved in order to attend the ordinary exam.

Multiple choice (given on the first part of the course)
• The student is asked to upload the answer.

Home assignment (given on the second part of the course)
• The students are asked in groups to write an essay based on an assignment given by the instructor at the last part of the course
• Number of students per groups is 4-5
• Number of pages: 5 pages per group
• Each group receives a 20 minutes feedback by the course instructor based on the instructor’s assessment of the essay.

Students will not have extra opportunities to get the required number of compulsory activities approved prior to the ordinary exam. If a student has not received approval of the required number of compulsory activities or has been ill, the student cannot participate in the ordinary exam.
If a student prior to the retake is still missing approval for the required number of compulsory activities and meets the pre-conditions set out in the program regulations, an extra assignment is possible.

The extra assignment is a 10 page home assignment that will cover the required number of compulsory activities. If approved, the student will be able to attend retake.
Performance Measurement and Incentives:
Exam ECTS 7,5
Examination form Oral exam
Individual or group exam Individual exam
Duration 20 min. per student, including examiners' discussion of grade, and informing plus explaining the grade
Preparation time With the listed preparation time: 20 Minutes
Grading scale 7-point grading scale
Examiner(s) Internal examiner and second internal examiner
Exam period Spring
Aids Open book: all written and electronic aids
The student is allowed to bring to the preparation room: Simple writing and drawing utensils, laptop/tablet as a reference book (NB: there are no electric outlets available), any calculator, books including translation dictionaries, compendiums, notes. PLEASE NOTE: Students are not allowed to communicate with others during the preparation time.
Make-up exam/re-exam
Same examination form as the ordinary exam
Course content, structure and pedagogical approach

The course continues the analysis of performance management systems and processes in a transaction cost/agency theory perspective as introduced in the course ‘Accounting and Control’ but also adds psychological and sociological theory in order to better understand and improve system and process design. Key topics addressed at the course are:
Generic design criteria for performance measurement system design
Key design choices related to the choice of performance measures as well as performance target setting (objective versus subjective; absolute versus relative etc.)
Promotion versus pay-for-performance as incentive systems

Intrinsic and extrinsic reward

Goal setting and feedback

Performance measures and culture

Control and trust


Description of the teaching methods
Theoretical dialog lectures are mixed with case discussions. The lectures introduce concepts and models decisive for understanding performance management issues and outline their theoretical assumptions. Through cases and exercises students train the application of concepts, theories and models in order to design value creating performance management and incentive systems in organizations.
The teaching methods is through debate, case studies and a constant dialog between theory and practice

Development of individual and social skills (competencies)
Through debate and dialog the student will develop oral and presentation skills. Since case preparation and presentation is conducted in teams the students develop cooperative skills.
Feedback during the teaching period
The students will during class receive feedback with respect to their case work .

The students receive feedback for the mandatory assignments – quiz and/or group case

Student workload
preparation and participation in dialog lectures 150 hours
preparation and participation in cases 30 hours
preparation for exam 26 hours
Expected literature

Indicative literature.
Selected chapters from Lazear & Gibbs: Personnel Economics in Practice, Wiley  Selected papers on Performance Management Systems and Processes

Last updated on 06-01-2021