Agency theory suggests that there may be managerial mischief when the interests of owners and managers (agents) diverge; one possible solution to this agency problem is the alignment of owner and agent interests through agent compensation and equity ownership. We develop the theoretical concept...

The role of compensation or extrinsic rewards, including pay for performance (PFP), has received relatively little attention in the organizational behavior/psychology literature on work motivation. What attention it has received has often taken the form of raising cautions about the potential...