Ethical Dilemmas in Performance Measurement

In this article we discuss the ethical dilemmas facing performance evaluators and the "evaluatees" whose performances are measured in a business context. The concepts of role morality and common morality are used to develop a framework of behaviors that are normally seen as the moral responsibilities of these actors. This framework is used to analyze, based on four empirical situations, why the implementation of a performance measurement system has not been as effective as expected. It was concluded that, in these four cases, unethical behavior (i.e. deviations from the ethical behaviors identified in the framework) provided, at least to some extent, an explanation for the lower than expected effectiveness of the performance measurement procedures. At the end of the paper we present an agenda for further research through which the framework could be further developed and systematically applied to a broader set of cases.     

An ideal Kyoto protocol: emissions trading, redistributive transfers and global participation

We demonstrate that an interregional policy scheme featuringtrading of carbon dioxide emissions, redistributive resourcetransfers and global participation, a scheme which we call ‘IdealKyoto Protocol’, yields an efficient equilibrium allocationfor a global economy. An altruistic international agency—say,the Global Environment Facility—should operate the resourcetransfer mechanism. In addition, regional governments shouldbe able to make independent policy commitments regarding howto control regional emissions of carbon dioxide in anticipationof the redistributive transfers. Our efficiency result suggeststhat the USA should be ‘bribed’ to reverse its decisionof not participating in the Kyoto Protocol.     

Health benefit vouchers: all talk and no action?

This article discusses the voucher--also called defined contribution--health care benefits model in terms of its features, the impetus for its development, obstacles to its implementation and the challenges it creates for employers. Although employers appear to have little current interest in health benefit vouchers, the author argues that a serious economic downturn could renew employers' interest in this promising concept.     

Sustainable growth, the DuPont way

Like many manufacturers, DuPont traditionally has grown by making more and more "stuff." And its business growth has been proportional to the amount of raw materials and energy used--as well as the resulting waste and emissions from operations. Over the years, though, DuPont became aware that cheap supplies of nonrenewable resources wouldn't be endlessly available and that the earth's ecosystems couldn't indefinitely absorb the waste and emissions of production and consumption. Chad Holliday, chairman and CEO of DuPont, believes strongly in the challenge of sustainable growth and makes the business case for it: By using creativity and scientific knowledge effectively, he says, companies can provide strong returns for shareholders and grow their businesses--while also meeting the human needs of societies around the world and reducing the environmental footprint of their operations and products. In fact, a focus on sustainability can help identify new products, markets, partnerships, and intellectual property and lead to substantial business growth. Holliday describes how DuPont developed a three-pronged strategy to translate the concept of sustainability into nuts-and-bolts business practices. Focusing on integrated science, knowledge intensity, and productivity improvement, the strategy was accompanied by a new way to measure progress quantitatively. Sustainable growth should be viewed not as a program for stepped-up environmental performance but as a comprehensive way of doing business, one that delivers tremendous economic value and opens up new opportunities. Ultimately, companies will find that they can generate substantial business value through sustainability while both enhancing the quality of life around the world and protecting the environment.     

Alcohol abuse and liver enzymes (AALE): results of an intercompany study of mortality

Evaluation of applicants for life insurance who have elevations of their liver function tests or an increased probability of alcohol abuse has always been difficult for underwriters. This paper reports the results of an intercompany study in which the pooled mortality experience of a group of insureds with evidence of alcohol abuse, an adverse driving record or elevations of the liver transaminases or gamma-glutamyl transferase is summarized.     

Preparing for evil

How can you plan for every crisis that might occur, even for ones you can't imagine? The task seems so daunting and so limitless that many firms don't even start. In fact, as the authors' 20 years of research shows, three out of four Fortune 500 companies are prepared to handle only the types of calamities they've already suffered, and not even all of those. That's unfortunate because the research also shows that crisis-prepared companies fare better financially, have stronger reputations, and ultimately stay in business longer than their crisis prone counterparts. Crisis-prepared companies use a systematic approach to focus their efforts. In addition to planning for natural disasters, they divide man-made calamities into two sorts--accidental or "normal" ones, like the Exxon Valdez oil spill, and deliberate or "abnormal" ones, like product tampering. Then they take steps to broaden their thinking about such potential crises. They consider threats that would be common in other industries, for instance. And they seek input from outsiders such as investigative journalists and even reformed criminals. But if these companies think broadly about possible threats, they think narrowly about implementation. Each year, smart companies focus their resources and attention on a few facilities picked at random, just as airlines conduct detailed security checks on just a few passengers for each flight. That reduces the probability of an attack on the entire organization even as it allows the business to migrate steadily to a higher level of crisis readiness. Crisis-prepared companies know that disasters cannot be managed through cost-benefit analyses. It is precisely because the effects of a disaster cannot be predicted or controlled that smart companies focus their efforts on preventing crises rather than containing them after the fact.     

Public sector health insurance trusts

Public sector associations have successfully developed and run employee health insurance pools for almost 30 years, providing members with savings and flexibility not available from commercial health insurance carriers. This article looks at the models, technical tools and governance philosophy that have contributed to their success in a very challenging business environment.