Objectivity and transparency are often considered to be desirable attributes of a performance measurement and incentive system. Subjectivity, on the other hand, is typically equated with bias and has a negative connotation. But accounting research shows us that a degree of subjectivity, in other words, allowing leeway for supervisors’ judgments in evaluations, is usually optimal. I argue that we should switch to the term ‘discretion’, to be better able to communicate its benefits. Moreover, I discuss the benefits and costs of discretion and of transparency. I surmise that a balance between objectivity and discretion is required, and that transparency is definitely not always desirable. Furthermore, I discuss how discretion relates to the way in which managers are held accountable. Holding managers accountable for outcomes is not always optimal, yet pervasive. Finally, I outline future research opportunities on discretion and accountability, apply the insights about performance measurement to the academic working environment, and promote the use of new research methods.

prestatiebeoordeling, transparantie, objectivity, subjectivity, discretion, incentives, accountability, transparency, performance evaluation, measurement system, management control, management accounting
Accounting (jel M41)
ERIM Inaugural Address Series Research in Management
Erasmus Research Institute of Management

van Rinsum, M. (2019, September 20). Utilizing Incentives and Accountability: In Control in Control?. ERIM Inaugural Address Series Research in Management. Retrieved from http://hdl.handle.net/1765/120287