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Awarded a research by Carmen Aranda, Javier Arellano and Antonio Dávila, by publishing house Elsevier

They have been awarded for their articleSubjective bonuses and target-setting in incentive contracts based on the budget

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30/04/20 15:19

The Deputy Director of the Master's DegreeBanking and Financial Regulation Carmen Aranda, the director academic director of the Master's DegreeExecutive in Human Resources and Digitalization Javier Arellano, and Professor and Head of the IESE Business School ChairSeat of Innovation at IESE Antonio Dávila, have received awards for their work articleSubjective bonuses and target setting in performance-based incentive contracts budget by the prestigious journal Management Accounting Research. The publication has awarded them the award Salomon, considering the articleas "an important contribution to the field of accounting research management ".

Professor Aranda defines workas "a breakthrough in performance-related reward systems". Specifically, she says it "demonstrates the possibility of customising incentive systems in commercial networks through implicit contracts between employees and managers", which contributes to motivation for better results.

The researchsample is the most complex use of subjectivity in budget-based incentive environments. It shows how discretion is used at the beginning, to set targets, and at the end, to decide on subjective bonuses. This associationallows targets to be customised to the different capabilities and characteristics of employees. And such customisation gives managers the possibility to set "targets closer to the optimal level from a target-setting theory perspective rather than being limited to the alternatives available in formula-based contracts".

These findings indicate that implicit contracts are also "observable" when objectives and their associated subjective discountare linked. They also show how combining different tools "opens up new alternatives for improving the motivational environment for employees".

Professor Arellano explains how receiving this awardis "a milestone for any team at research". And he says that for him it has been "an endorsement of the workcarried out in recent years", as well as a motivation to continue researching. He argues that researchmeans working surrounded by "uncertainty". And for this reason, beyond the recognition of the award, "it is very comforting and gives a lot of confidence to know that colleagues of the highest prestige consider that the line of workthat we are following makes valuable contributions to our areaof knowledge".

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