Michael Gibbs Receives Research Award from American Accounting Association

Michael J. Gibbs, Clinical Professor of Economics, received the 2007 Notable Contribution to Management Accounting Literature Award from the American Accounting Association. Gibbs was the principal writer of the winning paper entitled “Determinants and Effects of Subjectivity in Incentives” published in The Accounting Review.

Gibbs studies the economics of human resources and organizational design. The paper dealt with research that looked at the awarding of bonuses, pay satisfaction and firm performance. The study of 526 department managers in 250 car dealerships revealed that subjective bonuses are often used, according to the paper’s abstract, “to complement perceived weaknesses in quantitative performance measures and to provide employees insurance against downside risk in their pay.” Another factor that played a role in the effect of such bonuses was how long the manager had been in their position. Pay satisfaction, productivity, and profitability were directly correlated with tenure. They all increased along with the manager’s time on the job suggesting that trust between manager and employee influences subjectivity.
subordinate and supervisor.

He is currently co-authoring the 2nd edition of Personnel Economics for Managers. Gibbs and his three colleagues will receive the award at the Management Accounting Section Meeting in Chicago in August.