Organizations that link accounting measures to pay frequently contend with a variety of undesirable, and often unethical, behaviors. The business press is replete with stories about how employees engaged in dysfunctional, questionably ethical, and sometimes illegal behaviors in order to make themselves look better on performance evaluations and obtain bonuses. These behaviors generally occur in two related contexts: (1) biasing information or otherwise coordinating activities to "game" the realization of budgets or (2) timing reported or actual economic events to shiftincome between periods, also known as earnings management.
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