management installed performance pay to boost sales in the customer service centre of the company. The reform was successful. The …

performance index xceeds a threshold, like the FOA contract of Levin (2003), but the threshold can be set differently. We next … informativeness criterion sheds light on the nature of an ideal performance measure in relational contracting …

This note explores how to evaluate an agent's performance in standard incentive contracts. We show that the MPS … criterion proposed by Kim (1995) becomes a tight condition for one performance measurement system to be more informative than … statistical decision theory. Our results demonstrate that depending on the agent's potential deviations, ideal performance …