Discrete–Time Approximations of the Holmström–Milgrom Brownian–Motion Model of Intertemporal Incentive Provision

This paper studies the relation between discrete–time and continuous–time principal–agent models. We derive the continuous–time model as a limit of discrete–time models with ever shorter periods and show that optimal incentive schemes in the discrete–time models approximate the optimal incentive scheme in the continuous model, which is linear in accounts. Under the additional assumption that the principal observes only cumulative total profits at the end and the agent can destroy profits unnoticed, an incentive scheme that is linear in total profits is shown to be approximately optimal in the discrete–time model when the length of the period is small.     

The determinants of top management pay

Agency theory argues that companies need to structure their top management pay so as to attract, retain, motivate, and reward senior executives. It is implicit in this literature that managers should be rewarded for performance and that company size should not be a significant determinant of compensation. Empirical evidence in many countries has concluded, however, that size is a major determinant of management remuneration and the pay-for-performance link is very weak. This study examines the determinants of senior executives’ remuneration and bonus payments in Hong Kong companies using recently available data. We examine both the level of pay and changes in pay. Corporate size is found to be a major explanator of remuneration levels and of changes in the pay of the CEO and executive directors. Accounting profitability is also a significant explanator of compensation. Performance, as measured by stock returns, has little or no statistically significant relationship with pay; in fact, some of the results show negative relationships. Some share ownership characteristics have influences on the levels of remuneration. In particular, share ownership by directors and share ownership by institutional investors moderate the compensation levels. In contrast, corporate governance variables have little association with change in pay. Overall, the results imply agency arguments that advocate pay-for-performance compensation schemes are not major factors in setting top management remuneration in Hong Kong.     

Psychosocial versus biomedical risk factors in Kevorkian's first forty-seven physician-assisted deaths

This article examines biomedical and psychosocial data on the first forty-seven cases of physician-assisted suicide (PAS) of Kevorkian as collected by means of both a physical autopsy and a preliminary psychological autopsy. The following patterns emerge: 1) The physical condition of these PAS patients was not typical of the conditions that lead to death in the United States. 2) Consistent with the above findings, our pilot data indicate that only 31.1 percent of these patients were terminal. While 73.9 percent were described as reporting pain, only 42.6 percent were revealed at autopsy to have a specific anatomical basis for their pain. However 36 percent were described as depressed, 66 percent as having some disability, and perhaps of key importance, 90 percent expressed a fear of dependency. Most important, our pilot data suggest the possibility of large gender differences, since 3) 68.1 percent of these forty-seven PAS's are women and only 31.9 percent are men. This represents the reverse of the gender pattern for completed suicides in the United States in 1995, resembling instead the approximate pattern for unsuccessful suicide attempts. 4) Approximately 75 percent of both men and women in the above sample were described as reporting pain. Men were almost twice as likely to have had an anatomical basis for the pain and three times as likely to be terminal. Our pilot data indicate PAS women are more likely to be described as depressed and twice as likely to have had a history of previous unsuccessful suicide attempts. 5) Kevorkian's patients were older than the typical unaided suicides in America. Reported pain decreases with age as does depression; however anatomical basis for pain increases slightly with age, and no age effect emerges for terminality. 6) Approximately two-thirds of those physician-assisted suicides were at middle SES levels. History of disability was the biggest risk factor for the low SES patients and fear of dependency for the high SES patients.     

The development of the physicians' end-of-life care attitude scale

The Physicians' End-of-Life Care Attitude Scale (PEAS) was developed as an outcome measure for palliative care education. PEAS assesses the willingness of medical trainees to care for dying patients. Sixty-four Likert-type questions were created on the basis of discussions with focus groups of medical trainees, then administered to sixty-two medical students and residents. Total PEAS scores as well as personal preparation and professional role subscales (where higher scores indicated greater concern) possessed excellent internal consistency and reliability. In addition, there were substantial correlations between PEAS scores and the CA-Dying scale, a measurement of laypersons' fears about interacting with dying persons. Thus, PEAS adequately assesses the unique communication concerns of physicians in training regarding working with dying persons and their families. Correlations between PEAS scores and age were negative, while those who had experienced the death of a loved one had higher PEAS scores than those who did not. This suggests that for some persons, life experiences may lessen difficulties in dealing with dying persons, while for others, personal losses may exacerbate such concerns. The utility of PEAS in evaluating the efficacy of palliative care education as well as its potential to measure medical trainee's willingness to care for the terminally ill is discussed.     

On the Measurements of Board Composition: Poor Consistency and a Serious Mismatch of Theory and Operationalization

Over two dozen operationalizations of board composition can be identified from the empirical literature. A structural equations confirmatory factor analysis (LISREL 8.03) suggests that these operationalizations do not constitute a single construct of board independence. Instead, analyses strongly indicate three separate constructs. Common operationalizations of board composition, then, are neither tenable surrogates for one another nor are they interchangeable. Implications for empirical aggregation of studies, theory/measurement convergence, and the current corporate governance public policy debate are discussed.     

LINKING PROCESS CHOICE WITH PLANT-LEVEL DECISIONS ABOUT CAPITAL AND HUMAN RESOURCES

We examine how process choice links with design decisions about capital and human resources. Our analysis confirms empirically most expected differences between process- and product-focused plants for these decisions. What is unexpected is how top-performing plants resemble other plants within the same process choice category in most respects, while distinguishing themselves on a few selected process attributes. For example, better performing process-focused plants not only achieve higher machine flexibility levels and lower overhead costs as expected, but also have more intensive preventive maintenance programs. Similarly, product-focused plants that achieve certain hallmarks of process-focused plants also enjoy superior performance.     

A cross-validation of a structural equation model of accidents: organizational and psychological variables as predictors of work safety

A study to establish a structural equation model of accidents is presented. The eight variables included in the model were those associated with accidents in previous research. The reliability of questionnaires to measure those variables and a structural equation model relating them are provided. The model explaining the occurrence of accidents was cross-validated through three Spanish samples (n=123; 182; 124).The model presented a good fit to data in two samples, while a third had unclear fit indices. Therefore, most relationships among variables did not vary among these three samples. The role of the safety variables in the model is discussed. The discussion is also focused on risk measurement difficulties commonly reported in the literature. Finally, some suggestions for future safety research with structural equation modelling techniques are provided.     

Time management as a moderator of relations between stressors and employee strain

The purpose of this study was to examine whether time management behaviours moderated relations between stressors (role conflict, role overload, work-family conflict, and family-work conflict) and strain, as measured by scores on the General Health Questionnaire. It was predicted that use of time management behaviours would be negatively associated with strain. These relations, however, were expected to be mediated by feelings of control over time. It was further predicted that the use of time management behaviours would attenuate stressor-strain relations. Data collected from 525 employed men and women indicated, as predicted, that use of time management behaviours was negatively associated with strain. These relations were partially mediated by feelings of control over time. Moderator tests failed to provide support for time management behaviour as a moderator of stressor-strain relations. Implications of findings are discussed and future directions for time management research are suggested.