This paper studies how schooling admission tests affect economic performance in an economy where individuals are endowed with both academic and non academic abilities and both abilities matter for labor productivity. We develop a simple model with selective government held schools, where...

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,...

Implementing performance pay requires that workers' output be measured. When measurement costs differ among firms, those with a measurement cost advantage choose to implement performance pay. They attract the best workers, and both the level and variability of compensation are higher at these...

This paper experimentally investigates the impact of different pay and relative performance information policies on employee effort. We explore three information policies: No feedback about relative performance, feedback given halfway through the production period, and continuously updated...

Many firms use subjective performance appraisal systems due to lack of objective performance measures. In these cases, supervisors usually have to rate the performance of their subordinates. Using such systems, it is a well established fact that many supervisors tend to assess the employees too...

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,...

Subjective performance evaluation is modeled as auditing without commitment. A superior, who has to decide whether an where to audit the work done by a subordinate, takes into account all interim information he has obtained in the meantime. This invites workers to cover up and withhold...

Mit dem kürzlich verabschiedeten Gesetz zur Reform der Professorenbesoldung soll über eine leistungsorientierte Entlohnungsstruktur auf der Grundlage objektiv messbarer Kriterien eine Verbesserung der Effektivität und Qualität von Lehre und Forschung erreicht werden. Der vorliegende Beitrag...

Eine Beteiligung des Managements an Gewinngrößen spielt eine wichtige Rolle bei der Ausrichtung von Managemententscheidungen auf die Ziele der Unternehmenseigentümer. Dieser Beitrag zeigt auf, unter welchen Gewinnermittlungsregeln ein Agent zu optimalen Investitionsentscheidungen motiviert...