ABSTRACT
The performance of executives is generally measured in terms of overall organization or business unit performance, and the measurement periods used tend to be longer. Performance metrics such as profit, return on investment, return on equity, revenue growth, market share, economic value added and total shareholder return are commonly used in performance models used to evaluate and reward executives. In corporations and in most other private sector organizations the board of directors is directly responsible for establishing the criteria and standards used to measure and reward executive performance. The board is charged with evaluating executive compensation levels in comparison to other similar organizations and for ensuring they are “reasonable” according to whatever philosophy they adopt. The increasing popularity of the balanced scorecard approach to defining and measuring organization performance has served to clarify expectations in advance and to define “performance” more broadly than has historically been the case.
