Pure incentive schemes rely on agent self-interest, rather than more coercive control, to motivate subordinates. Yet most organizations, and in particular public agencies, rely very little on pure incentive contracts. Most organizations rely on the primarily coercive mechanisms of monitoring and...

Pure incentive schemes rely on the agent's self-interest, rather than more coercive control, to motivate subordinates. Yet most organizations, and in particular public agencies, rely very little on pure incentive contracts and instead use coercive mechanisms of monitoring and sanctioning that...

While many studies have examined the association between merit-based pay and organizational performance, few have assessed the psychological well-being of employees in agencies with such financial incentive schemes. We show that employees in agencies with merit-based pay are less satisfied with...

This essay discusses an integrative economic theory that reconciles rank-order tournaments with the traditional public administration concern for accountability in government. Recent reforms have concentrated on organizational designs that flow from piece-rate approaches to employee compensation...

The canonical principal-agent problem involves a risk-neutral principal who must use incentives to motivate a risk-averse agent to take a costly, unobservable action that improves the principal's payoff. The standard solution requires an inefficient shifting of risk to the agent. This paper,...