Abstract
The purpose of this work is to analyse the preferences of Chief Executive Officers (CEOs) in relation to the different components of incentive systems: financial vs. non-financial. The incentive systems could be an instrument for the sustainable development of Firms. Upper Echelons Theory establishes that the traits of executives affect the decision-making processes, and among these traits, narcissism is a potentially influential factor in these processes. Therefore, the extent to which the level of narcissism influences the choice of one instrument or another is also analysed. For this purpose, a choice experiment has been carried out to analyse the preferences of CEOs. The questionnaire developed incorporates both the choices about different systems and the NPI-16 test that allows individuals to be classified according to their narcissistic nature. The main results show that, in general, there is a stronger preference for non-financial instruments than for financial instruments in the design of incentive systems. However, narcissistic CEOs show a clear inclination towards financial incentives that bring them benefits rather than provide incentives.
Highlights
The main objective of management control systems (MCS), as practices designed and implemented in organisations, is to ensure that individuals belonging to that organisation direct their efforts towards achieving the objectives established in the strategy and, perform better [1,2]
This work aims to analyse the preferences of Chief Executive Officers (CEOs) in relation to incentive systems
In order to analyse whether this personality trait influences their preferences for incentive systems, an analysis was carried out based on the degree of narcissism shown by the CEO
Summary
The main objective of management control systems (MCS), as practices designed and implemented in organisations, is to ensure that individuals belonging to that organisation direct their efforts towards achieving the objectives established in the strategy and, perform better [1,2]. In the configuration of the systems to achieve such behaviour, the design and implementation of incentive systems capable of encouraging the coordination and commitment of individuals and [3,4] motivating and directing their efforts is especially relevant [5,6] Their effect on both employee and organisational performance [7,8,9] has been empirically demonstrated, and this has led to interest in researching them [5,10,11,12]. There are models that group together the different types of incentives [15], which include base salary, performance, and career management; salary in the event of contingencies; and good working environment, perks, and work–life balance These are designed according to the norms and cultures of each country [16], so it is easy to find specific features that differentiate them
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