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1.4. STRUCTURE OF THE THESIS 11
presents the first study of this thesis. This study addresses the use of RPE for the performance
evaluation and the target-setting process of business unit managers. It describes
the prevalence of RPE at the level of business unit managers and antecedents to RPE use.
This chapter studies to what extent RPE use is associated with high levels of common
uncertainty (as a noise-inducing factor) and information asymmetry (as a driver for managerial
opportunism). Summarizing the findings, the first study shows that RPE use is
indeed associated with drivers of noise and opportunism, albeit with mixed results for the
latter.
Chapter 2 tests theoretical relations that build on considerations of noise-reduction and
opportunism-mitigation to motivate the use of RPE. Adding to the analyses of chapter 2,
the third and fourth chapter empirically study these underlying considerations in a more
direct manner. In chapter 3, the second study investigates whether RPE is effective in reducing
noise that stems from the external environment. The data show that when RPE is
used specifically to determine the performance target and more generally to mark the performance
evaluation of the agent to market, noise in the performance evaluation is reduced.
The third study of this thesis, documented in chapter 4, focuses on RPE’s effectiveness in
mitigating the room for managerial opportunism. Contrary to my expectations, the study
does not support the opportunism-mitigation characteristic of RPE.
Although the three studies in this thesis share a common theme and methodology, each
research chapter is presented as an independent study. As a result, parts of the chapters
overlap, for example, in parts of the theory, but most noticeably in the sample descriptions
and method-sections. I deem this overlap necessary to preserve the character of each
chapter as an independent research report addressing its own specific research topic.
Finally, chapter 5 summarizes and concludes this dissertation and discusses its limitations.