Bonus and penalty contract acceptance in a balanced scorecard environment: a case study

Some recommend the company's incentive system to be linked with the Balanced Scorecard (BSC) in order to ensure that employees work towards the strategy by the goals on the BSC Incentive systems have an impact on effort and task performance. However the effectiveness of incentives can vary dependent on personal, task- and incentive scheme variables as well as on some motivational mechanisms like goal setting. The incentive contract choice (bonus vs. penalty) was investigated by Luft (1994). In our research, we investigate whether bonus and penalty systems in a BSC-environment are accepted or not and what factors influence this (non-)acceptance