{"title":"Incentivization in centrally managed systems: Inconsistencies resolution","authors":"","doi":"10.1016/j.omega.2024.103160","DOIUrl":null,"url":null,"abstract":"<div><p>In centrally managed systems (CMSs), the need for incentivization systems at the local management level is crucial to optimize overall performance. Three alternative incentive systems have emerged within the centralized resource allocation (CRA) framework, aiming to measure the contribution of decision-making units (DMUs) in CMSs. However, we identify inconsistencies within these approaches and present them through illustrative examples. First, existing methods may struggle to effectively distinguish between CRA-efficient and CRA-inefficient DMUs, potentially resulting in inappropriate penalties or rewards for some the DMUs. Second, they may encounter difficulty in differentiating among CRA-efficient DMUs, especially when dealing with non-extreme DMUs or masked data within the dataset. Third, these methods may lack precision in measuring the impact of non-extreme CRA-efficient DMUs on overall performance. To address these limitations, we first highlight certain misconceptions related to individual efficiency within CMSs in the existing literature. Subsequently, we establish a fundamental characterization of individual efficient DMUs by outlining necessary and sufficient conditions for categorizing a DMU as CRA-efficient. For the second and third limitations, we adopt an endogenous perspective to quantify the influence of each CRA-efficient DMU. This involves calculating the maximum potential contribution of the DMU under evaluation in constructing the projection points of other DMUs. Furthermore, we propose a new method to handle masked data well in differentiating among CRA-efficient DMUs. We show the validity and applicability of our approaches using a real dataset.</p></div>","PeriodicalId":19529,"journal":{"name":"Omega-international Journal of Management Science","volume":null,"pages":null},"PeriodicalIF":6.7000,"publicationDate":"2024-07-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0305048324001257/pdfft?md5=067f85a3ab18358ac6db7fe1996c43b6&pid=1-s2.0-S0305048324001257-main.pdf","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Omega-international Journal of Management Science","FirstCategoryId":"91","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0305048324001257","RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"MANAGEMENT","Score":null,"Total":0}
引用次数: 0
Abstract
In centrally managed systems (CMSs), the need for incentivization systems at the local management level is crucial to optimize overall performance. Three alternative incentive systems have emerged within the centralized resource allocation (CRA) framework, aiming to measure the contribution of decision-making units (DMUs) in CMSs. However, we identify inconsistencies within these approaches and present them through illustrative examples. First, existing methods may struggle to effectively distinguish between CRA-efficient and CRA-inefficient DMUs, potentially resulting in inappropriate penalties or rewards for some the DMUs. Second, they may encounter difficulty in differentiating among CRA-efficient DMUs, especially when dealing with non-extreme DMUs or masked data within the dataset. Third, these methods may lack precision in measuring the impact of non-extreme CRA-efficient DMUs on overall performance. To address these limitations, we first highlight certain misconceptions related to individual efficiency within CMSs in the existing literature. Subsequently, we establish a fundamental characterization of individual efficient DMUs by outlining necessary and sufficient conditions for categorizing a DMU as CRA-efficient. For the second and third limitations, we adopt an endogenous perspective to quantify the influence of each CRA-efficient DMU. This involves calculating the maximum potential contribution of the DMU under evaluation in constructing the projection points of other DMUs. Furthermore, we propose a new method to handle masked data well in differentiating among CRA-efficient DMUs. We show the validity and applicability of our approaches using a real dataset.
期刊介绍:
Omega reports on developments in management, including the latest research results and applications. Original contributions and review articles describe the state of the art in specific fields or functions of management, while there are shorter critical assessments of particular management techniques. Other features of the journal are the "Memoranda" section for short communications and "Feedback", a correspondence column. Omega is both stimulating reading and an important source for practising managers, specialists in management services, operational research workers and management scientists, management consultants, academics, students and research personnel throughout the world. The material published is of high quality and relevance, written in a manner which makes it accessible to all of this wide-ranging readership. Preference will be given to papers with implications to the practice of management. Submissions of purely theoretical papers are discouraged. The review of material for publication in the journal reflects this aim.