We investigate whether referral-based hiring exacerbates or mitigates control problems. Incentive contracts can be used to attract employees with certain traits. However, whether the outcomes are positive for the firm or not depends on the quality of incentive contracts. Our research setting...

We examine how changing the allocation of hiring decision rights in a multiunit organization affects employee-firm match quality, contingent on a unit's circumstances. Our research site, a US retail chain, switched from a decentralized hiring model (hiring by business unit managers—in our...