감시와 보상이 예산의 톱니현상에 미치는 영향

[Purpose]This study investigates empirically whether the sales target change in the following year is positively associated with performance to target sales in the current year. In addition, the study examines the moderating effects of monitoring and compensation for branch managers on the relationship between target change and performance to target. [Methodology]Using 742 branch－year data of an apparel company in Korea from 2014 to 2017, we perform ordinary least square regression and White－corrected regression analysis to test the research models. [Findings]We find evidence that performance relative to target sales in the current year has significantly positive effect on target change in the following year. This test result implies that target ratcheting exists. We also find that the association between target change and performance to target is lower when current performance falls short of target, which means that the asymmetric pattern of target ratcheting occurs. In addition, we present evidence that the association between target change and performance to target is significantly weaker when the monitoring of the head office on branch managers as well as the compensation for branch managers increase. These test results imply that monitoring and compensation for branch managers are important factors affecting target ratcheting. [Policy Implications]The test results of this study provide the empirical evidence on the existence and asymmetric pattern of target ratcheting. Furthermore, the test results present the evidence that monitoring and compensation for branch managers can affect the target ratcheting. These findings not only make differentiated contributions to the existing research in target ratcheting, but also facilitate future empirical research. In addition, the study helps practitioners to understand the characteristics that affect the goal setting and to develop control mechanism in budgeting practice.