Simple rewards in a complex world -Incentive systems in management consulting

Abstract: Research problem: · Which performance measures are used and how are employees evaluated at two small management consulting agencies? · Which rewards are used by these companies and in what way? Purpose of this study: This thesis will aim to give an explanation of how incentive systems are used by two small management consulting agencies in Gothenburg. The study will try to understand how performance measures are applied and how rewards are used in the investigated companies. The method used: A total of seven people were interviewed from two different management consulting agencies with same approximate size. Two of the respondents had executive roles and the remaining part was consultants at different levels of the firms. Theoretical framework: Theoretical material that has been used in this thesis is mostly concerning performance measurement and rewards. Some scientific articles have been used as well about agency problem, management and the service industry. Conclusions: We can draw the conclusion that the type of work conducted by management consultants is complex enough for subjective evaluation to be necessary to give a fair view of employee performance. The major parts of the rewards that are used by the organizations are collective and practically all employees are entitled to them. The monetary rewards are the only ones that are not equal between employees in absolute term, though they are in relative terms.