This paper contributes to the literature on the relationship between human capital and organizational performance. We use detailed longitudinal monthly data on nursing units in the Veterans Administration hospital system to identify how the human capital (general, hospital-specific and unit or...

In this study we examine the effects of transferring physicians from a compensation system based on salary to a profit-sharing system. Consistent with theory, we find that the change has a large and significant effect on the quantity of services provided. In addition, we find a selection effect,...