The importance of innovation for both society and organizations’ survival is widely accepted. In addtion, scientific management developed by Taylor in 1911 highlighted the relevance of measurement systems. Knowledge of both concepts evolved and improved during the 1900s, but benefits of joining them and creating a performance measurement system for innovation were first neglected, later questioned, and accepted only in the last decade. This chapter aims at providing the criteria and steps needed to set up a measurement system that helps to enhance innovation. The chapter is structured as follows: first, it discusses the evolution of performance measures for innovation. Second, it introduces strategy as leading the innovation measurement system, and the business model as the framework required to key metrics. Third, the chapter emphasizes the importance of cascading down this business model to the different organizational levels. Finally, it uses the Balanced Scorecard concept to design the measurement system because it covers both previous dimensions: the business model and its drill down.

This study explores the permanent and transitory component of abnormal returns in a sample of firms competing in Latin America during the period 1990-2006. It uses a novel model that simultaneously estimates the permanent and transitory component for the firm-specific, industry and country effects. The main findings are that (1) the persistence of abnormal returns is around 51% of the yearly returns (autoregressive coefficient); (2) persistence is mainly driven by firm-specific effects, both at the permanent and transitory level; (3) industry is more important than country when considering the permanent component of abnormal returns; and (4) country is more important than industry when considering the transitory component of abnormal returns.

The purpose of this work is to study on compensation packages for top management teams. The analysis focuses on the annual pay plus change in equity portfolio value, how its level, pay-performance sensibility and structure vary across managerial categories, and the impact of these variations on corporate performance. Using a multilevel mixed-model approach on 589 companies from the S&P 1500 between 1998 and 2005, the evidence shows that CEO compensation packages are not isomorphic to those of non-CEO executives, while on average no significant differences are found between divisional and corporate executives. Despite this, the random effects show that differences between two categories vary across companies, with shareholder return been lower for companies where differences between corporate and divisional managers are greater.

The purpose of this work is to understand and comprehend how performance measurement system is used to accomplish these two roles of influencing and facilitating decisions at the corporate and divisional level. The first paper is a literature review that analyses the use of performance measures to enhance innovation focusing on its decision facilitation role. The next two papers are empirical and focus on the decision influencing role of performance system through its link with incentive systems. I conclude that there is no universal measurement system, nor universal criteria that model the differences. For innovation activities the role of performance measurement is mainly facilitating decisions while for corporate and divisional performance are use to influence activities by aligning the executives with the shareholder interest, but the criteria recommended by the theory to develop a measurement system does not find empirical support in my dataset. Additionally, the companies with performance measurement system that promote cooperation instead of competition between executives seem to be the ones with higher corporate return. Comite: Advisor: Prof. Antonio Davila (IESE Business School) Committee: Prof. Fernando Peñalba (IESE Business School) Prof. Albert Fernandez Terricabras (IESE Business School) Prof. Miguel Canela (University of Barcelona) Prof. Jordi Carenys (EADA) Prof. Josep Maria Argilés i Bosch (University of Barcelona)

The purpose of this work is to study on compensation packages for top management teams. The analysis focuses on the annual pay plus change in equity portfolio value, how its level, pay-performance sensibility and structure vary across managerial categories, and the impact of these variations on corporate performance. Using a multilevel mixed-model approach on 589 companies from the S&P 1500 between 1998 and 2005, the evidence shows that CEO compensation packages are not isomorphic to those of non-CEO executives, while on average no significant differences are found between divisional and corporate executives. Despite this, the random effects show that differences between two categories vary across companies, with shareholder return been lower for companies where differences between corporate and divisional managers are greater

The purpose of this work is to study on compensation packages for top management teams. The analysis focuses on the annual pay plus change in equity portfolio value, how its level, pay-performance sensibility and structure vary across managerial categories, and the impact of these variations on corporate performance. Using a multilevel mixed-model approach on 589 companies from the S&P 1500 between 1998 and 2005, the evidence shows that CEO compensation packages are not isomorphic to those of non-CEO executives, while on average no significant differences are found between divisional and corporate executives. Despite this, the random effects show that differences between two categories vary across companies, with shareholder return been lower for companies where differences between corporate and divisional managers are greater El propósito del presente trabajo es estudiar los paquetes de incentives para ejecutivos de la alta dirección. El análisis focaliza en el pago anual más el cambio en el valor del portafolio, cómo el valor, sensibilidad pago-performance y estructura de compensación varían a través de las categorías de ejecutivos, y la importancia de estas variaciones en la performance de la empresa. Aplicando un modelo de efectos mixto para datos anidados sobre 589 compañías del S&P 1500 entre los años 1998 y 2005, la evidencia muestra que los paquetes de compensación de los CEOs no son similares a los de otros ejecutivos, mientras en promedio no se detectan diferencias significativas entre ejecutivos divisionales y corporativos. A pesar de esto, los efectos aleatorios muestran que las diferencias entre estas categorías varían a través de las diferentes compañías, con el retorno para los accionistas siendo menor en compañías donde las diferencias entre ejecutivos corporativos y divisionales son mayores.