When designing incentives for a manager, the trade-off between insurance and a "good" allocation of effort across various tasks is often identified with a trade-off between the responsiveness (sensitivity, precision, signal-noise ratio) of the performance measure and its similarity (congruity,...

Leistungsorientierte Vergütungssyteme können mit nicht-intendierten Effekten einhergehen, die in der Personalwirtschaftslehre unter dem Stichwort der Motivationsverdrängung diskutiert werden. Die Evaluierung der Wirkung leistungsorientierter Vergütungssysteme durch Mitarbeiterbefragungen...

A large, mature and robust economic literature on pay for performance now exists, which provides a useful framework for thinking about pay for performance systems. I use the lessons of the literature to discuss how to design and implement pay for performance in practice.

This paper discusses some issues of compensation policy in business and academia from the perspectives of incentive theory, other theories, and empirical research. The main conclusion is that mechanical rules for performance-related pay are likely to be inferior to more subjective performance...