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W
A
A-12 attack plane example, 12,
44, 196
Aerostyling example, 56
Agency theory, 8, 9, 32ff., 191
Agent, 33ff., 44, 45, 48-51, 52ff.,
58-65, 66ff., 74ff., 87-89, 92ff., 103, 108-9,
114-17, 126, 128, 131, 133, 137ff., 142, 164,
166-69, 173ff., 191, 205 (see also Disutility;
Effort; Self-interest; Utility)
best-mix path of, 56, 69
choice path of, 64-65, 78-79
delegatory management and,
87-89, 93-95, 103
dysfunction and, 73, 140
effort capacity, 48, 133-34
incentives, 66-73, 78-79, 131,
164
informational measurement and,
114-17
opportunism, 168-69, 174, 178
payment, 33-39, 45, 66-67,
69, 75-78
role of, 33, 44, 74-75, 191
supervision of, 58-65, 76-79,
92-94, 115-16, 126, 128, 194
system exploitation, 138-40
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B
Behavioral science, 8-9, 38, 87,
125
Best-mix path, 49-51, 53, 56,
75-76, 92-94
of agent vs. customer, 56
choice path vs., 64-65, 135
delegation and, 94, 108-9
distortion and, 50-51, 78
full supervision and, 61, 69, 92-94
partial supervision and, 63, 93-94
principal and, 66, 135
unsupervised behavior and, 59-61, 88-89
Blau employment agency example, 6ff., 11-12,
17, 25, 37, 39, 44-46, 53, 61, 62, 64, 68,
74ff., 127
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C
Capability Maturity Model (CMM),
162
Card, D., 26, 70, 112, 118, 122
Choice path, 64-65, 78-79, 134-35
Cockpit analogy, 27-28, 122,
173
Consultants, 158, 160, 163, 164-65,
174
Contracts, 23-25, 52, 98, 179
employment, 24, 203
forcing, 34, 52, 53, 61
social, 171-72
Control, 25, 38, 81, 112-13, 127,
128, 129-31, 135
Control, 25, 38, 81, 112-13, 127,
128, 129-31, 13
internal motivation and, 38,
81
physical systems of, 129-31
Cost-benefit model analysis, 34ff.,
54, 66-67, 173
Criminal justice system example,
13-14, 171ff.
Critical dimensions, 39-40, 60-62,
68-70, 94, 115, 126, 128, 164, 191, 194
cost of measuring, 68, 100
Culture, 98, 181-82
non-attributional, 140-46
Customer, 44ff., 73, 74ff., 87,
88, 93-94, 108-9, 126, 138, 163-64, 167-70,
192 (see also Customer value)
as arbiter of value, 167
preferences for effort allocation,
45-51, 52-53, 56-57, 75, 108
principal compared with, 44-45,
167-69
Customer value, 45ff., 53, 65,
66, 75ff., 88, 93-94, 108-9, 163-64, 167-69
agent utility and, 55-56
delegation and, 94
full supervision and, 61, 126,
134
importance of, 44-45
incentive system and, 58-59
Customization, 105-6, 128
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D
Delegatory management, 87-91,
92-101, 103, 106ff., 112, 123, 135-36, 138,
140ff., 155-56, 177, 192, 193
converting situation for, 103,
106-8
costs, 89, 92ff., 102ff., 140ff.
customer value and, 94
dysfunction and, 88
informational measurement and,
123
Japanese firms and, 142ff.
leadership and, 107, 140
measurement-based vs., 89-91,
92-101, 108-13, 135-36, 142ff.
not recommended, 102-13
of software development, 155-56
subtlety of, 107-8, 109
DeMarco, T., 5, 66, 70-71, 89-90,
105, 110-12, 113, 118-19, 122-23, 128-29, 141,
167, 199
Deming Award, 165
Deming's Fourteen Points, 111
Department of Defense example,
12, 15, 44, 102, 163
Distortion, see Incentive distortion
Disutility, 34, 52, 59, 63, 67, 87-89, 192
from cost of delegation, 89
forcing contract and, 52
Dysfunction, 5ff., 10ff., 21ff.,
30-31, 37ff., 42-51, 59ff., 69, 73, 88, 94,
108, 111-12, 124-36, 137-46, 147ff., 157-58,
163, 166-67, 171ff., 180, 185, 189, 192
Baldrige Award and, 166
consultants and, 158, 164-65,
174
cynical explanation of, 126,
137-46, 174
delegatory management and,
88, 94
distortion and, 47-48
earnest explanation of, 125-27,
137, 139, 189
expert interviews about, 147-53,
157-58
incentive systems and, 59,
63-65, 138
inevitable, 140-46
management evaluation methods
and, 163, 166-67
measurement and, 42-51
measurement-based management
and, 88
partial supervision and, 64,
69, 73, 94
prevented by full supervision,
61-62, 69, 94
software development and, 111-12,
147
targets of performance and,
94, 108
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E
Economic Theory of Agency, 8,
32-41
Economist, The, 3, 12, 85, 86,
107, 165, 195, 198, 199, 205, 208
Effort, 18, 33ff., 45ff., 52ff.,
58ff., 66-69, 73, 75-79, 81, 87-89, 92-96, 108-9,
133-34, 173, 176, 191, 192-93, 194
capacity, 48-49, 93, 133-34
cost of, 33-36, 66-67, 76-78, 89, 95-96
customer preferences and, 45-51,
75
delegation and, 92-94, 108-9
forcing contract and, 52
fully supervised, 60-62, 65,
108
incentive distortion and, 47-51,
59, 65, 78
incentive systems and, 50-51
internal motivation and, 81
mix problem, 37-41, 45, 55
observability of, 35-36, 52-55,
68, 97, 172-73, 176
partially supervised, 62-65,
69
revenue and, 35-36
unsupervised, 58-60, 61, 64,
88-89, 92, 194
Employee, 4, 24, 98-99, 108-9,
191 (see also Organizational identification)
accountability, 4, 108
lifetime employment of, 87,
89, 99, 107, 142
performance reviews, 53
trust, 107, 109
Environmental covariates, 97
Expert interviews, 147-58, 183-90
Expert X, 4, 70, 114
External motivation, 81ff., 172,
181
debasing effect of, 89-90
internal vs., 81-87
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F
Full supervision, 58, 60-62,
68ff., 77, 80, 92ff., 108, 139, 164, 193
control vs., 128
cost of, 70, 72, 95-97, 100,
104, 164
critical dimensions and, 61-62,
68, 115-16
distinguished from partial,
126-27, 133-34
distortion prevented, 65, 69
experts' views of, 152 incentives
and, 152
internal motivation and, 90
partial mistaken for, 73, 79,
126-27, 132
probabilistic measurement and,
173
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H
Harvard Business Review (HBR),
2-3, 198, 199, 200, 201, 202, 203, 205, 206
Holmstrom and Milgrom (H-M) model,
37-41, 42-44, 54
Human Relations School (HRS),
84, 86, 142
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I
Incentive distortion, 17, 47-51,
53-54, 59, 108-9, 177
best-mix path and, 60, 61,
78, 93
delegatory management without,
88, 109
extra effort vs., 47-51
full supervision and, 69
partial supervision and, 65,
108
Incentives dysfunction and, 59,
63-65, 79
electronics factory example,
143-44
experts' views of, 152-54
internal motivation and, 38,
141
law and, 172, 174
organizational model of, 68-73
salary increases vs., 22
systems of, 35, 50-51, 54, 55,
58-59, 63-65, 66-73, 79, 108, 143-44 targets,
61
Inducements and contributions
framework, 24, 83
Internal motivation, 38, 52-57,
81-91, 92, 123, 172ff., 181
consultants and, 174
delegatory management and, 123
external vs., 81-87, 89-90
incentives and, 38, 108, 141
laws and, 172
measurement, 81-91, 181
model of, 52-57
no supervision and, 58
International Standards Organization
(ISO) 9000 Certification, 110, 159, 160-62,
164-65, 200, 204
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J
Job redesign, 70, 103ff., 128,
132-33, 135, 137
Jones, C., 27, 70
top
L
Loose-cannon problem, 119-20,
146
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M
Malcolm Baldrige Quality Award,
110, 159-60, 164-66, 200
Management-By-Objectives (MBO),
109-12, 134
Management
methods of evaluation, 159-70
self-assessment tool, 121-23
Measurement (see also
Critical dimensions; Dysfunction; Measurement-based
management; Motivational measurement)
aggregation, 118-19, 121
analogy to physical control
systems, 62, 129-31
coordination, 26, 29, 185
corruption of, 2, 31, 55, 131
cost of, 5, 34-35, 66-71, 92ff.,
104, 108, 133, 155-57, 164
culture, 181-82
informational, 21-22, 25ff.,
81, 114-23, 151-52, 184-86, 193
internal motivation and, 81-91,
173
of key area criteria, 40-41
lines of code (LOC) example,
112, 117
management evaluation methods
and,
159-70 model of, 42-51
optimal investment in, 92,
94
probabilistic, 35, 36, 55,
172-74
problem, 180-82
process refinement, 25-26,
29, 120-21, 128, 185
of quality, 18, 67, 72-73
redesign for, 103ff., 128, 132,
135, 137
reward and, 22
as self-assessment tool, 121-23
stockholder view of, 2, 15,
139
of true output, 18, 38-39,
44, 116
of true quality, 18
uses of, 2, 21-31
Measurement-based management,
71, 81, 87ff., 92-101, 102-13, 127, 133, 135-36,
192, 193
converting for, 103ff.
delegatory vs., 87-88, 92-101,
108-12, 135-36
dysfunction and, 88, 146, 163
evaluation methods as, 163-64
inappropriate practices, 109-11
software and, 147
Metrics, 154, 156-58, 187, 188
Model assumptions of, 42-44,
55-57, 124-25, 133
of organizational incentives,
68-73
societal implications of, 171-79
summary of, 74-80
Motivation, see External motivation;
Internal motivation
Motivational measurement, 5, 21ff.,
29-31, 32ff., 47, 51, 68-69, 114ff., 123, 151-52,
173, 184-86, 187, 189, 190, 193
aggregation and, 118
experts' views of, 151-52
informational vs., 29-31, 114-16,
123, 151-52, 186
prevention of, 190
probabilistic measurement and,
173
Musa, J., 118-19
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N
Naive continuous improvement,
133
No supervision, 58-60, 62, 67,
68-69, 77, 80, 88, 92, 94, 95, 104, 194
delegatory management and, 88,
94, 95
measurement cost and, 67, 104.
top
O
Organization, 97ff., 106ff., 140
incentives model, 68-73
intimacy, 106-7, 109
measurement in, 2, 21-31
public vs. private, 98, 100,
140
Organizational identification,
38, 84, 87, 89, 95, 97, 140ff., 158, 172, 178,
181
consultants' lack of, 158
delegatory management and,
89, 95, 97
group identity, 142, 144, 172,
178
internal motivation and, 38,
84, 181
top
P
Partial supervision, 58, 62-65,
67ff., 72-73, 77, 79, 80, 92ff., 100, 104, 108,
126ff., 133-34, 185, 194
dysfunction and, 94, 127
measurement costs and, 67,
68, 104
mistaken for full, 73, 79,
126-27, 133-34
performance targets and, 69,
134, 185
Paulish, D., 4, 119
Payment, see Agent payment Performance,
4ff., 54-55, 97 (see also Agent effort; Effort)
Pluralization of consumption,
103, 203
Principal, 32-38, 44-45, 48,
52ff., 60ff., 66ff., 74ff., 89, 92-95, 98, 102-4,
115-17, 125-29, 132-36, 137-39, 167-69, 191,
194, 196, 205
as agent, 137, 167
agent payment by, 33-39
cost situations, 76ff.
as customer, 44-45, 167-69
customer preferences and, 56-57
cynical explanation of behavior,
137-46
earnest explanation of behavior,
125, 126-27, 137
exploitation of system, 138ff.
forcing contract and, 52-53,
61
inference problem, 127, 133-36
management method of choice,
92-95, 103
mistakes partial supervision
for full, 73, 79, 127
motivational measurement and,
68ff.
standardization reflex, 127-28,
132-33, 137
supervision mode of choice,
67, 70, 79-80
target-setting, 61-63, 65, 67,
69, 73, 116
Produce standards example, 13,
19-20, 30-31, 44
Putnam, L., 69, 112
top
Q
Quality Function Deployment (QFD), 56-57
Quantity, mystique of, 127, 131-33
top
R
Red pen example, 120, 141
Repetitiveness of task, 95, 102,
103, 105, 106
Ross-Holmstrom (R-H) model, 32-33,
35-37, 43-44, 52, 54, 86
top
S
Same-value lines, 47-49, 53,
64, 66, 135
Schwab, C., example, 1, 2, 5
Self-interest, 83, 84, 126, 138,
140, 141, 178-79
Semco example, 85-86, 87
Software Capability Evaluation
(SCE), 110, 159, 162-63, 165-67
Software development, 55-56,
73, 102, 103-6, 111-12, 131, 132-33, 135, 141,
147, 151-52, 155-58, 171-72, 180
delegatory management and,
102, 155-56
dysfunction and, 111-12, 147
factory analogy, 105-6, 108
job redesign and, 132-33, 135
measurement comprehensiveness,
151-52
metrics, 154, 156-58
standardization, 103, 104,
132-33
Software Engineering Institute
(SEI), 149, 159, 183 (see also Author
Index)
Software Productivity Consortium,
129ff., 206
Soviet industry example, 5, 14,
196
Specification, 103-5, 108, 128
Standardization, 103, 104-5,
108, 127-28
reflex, 127-28, 132-33, 137
Subdivision, 104-5, 108, 128
Supervision, 58-65, 76-79 (see
also Agent supervision; Full supervision;
No supervision; Partial supervision)
top
T
Theory X and Theory Y management methods, 84,
86
Tilford, E., 70, 72, 110, 112,
114-15, 118, 119-20, 141, 167
Trans World Airlines (TWA) example,
1-2, 10
top
U
U.S.S. Omaha example, 12, 13
Utility, 34, 55, 59, 63, 87-89,
92, 93, 133, 192, 194
top
W
Weimar Republic census example,
119, 141
Word processor example, 169-70
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