performance. Measured performance equals actual performance plus noise. We compare a stable environment where the noise is small … expectancy theory; noisier performance measures do not lower work motivation. …

When verifiable performance measures are imperfect, organizations often resort to subjective performance pay. This may … towards specific tasks. We show that subjective performance pay based on evaluation by a biased supervisor has the same … distorting effect on the agent's effort allocation as incentive pay based on an incongruent performance measure. If the principal …

Theoretical analyses of (optimal) performance measures are typically performed within the realm of the linear agency … noise in the performance measure. In contrast, expectancy theory as developed by psychologists predicts lower effort levels … for noisier performance measures. We conduct a real effort laboratory experiment and find that effort levels are invariant …

This paper studies how firms can efficiently incentivize supervisors to truthfully report employee performance. To this … altruism sometimes provides a net incentive to report performance truthfully, rather than to bias evaluations upward. The … risk by overrating the agent's performance. Second, I show that by screening for one supervisor type, firms can incentivize …

concerned with society's benefits from the agency's overall performance, but also with the organization's public image as formed …