Incentives for managers are often provided by offering them performance-based compensation schemes. The efficiency of such monetary compensations, however, depends on several factors, among them the quality of the employed performance measures, the information available for contracting purposes,...

We identify a new problem that may arise when heterogeneous workers are motivated by relative performance schemes: If workers' abilities and the production technology are complements, the firm may prefer not to adopt a more advanced technology even though this technology would costlessly...

We analyze the effects of wage floors on optimal job design in a moral-hazard model with asymmetric tasks and imperfect aggregate performance measurement. Due to cost advantages of specialization, assigning the tasks to different agents is efficient. A sufficiently high wage floor, however,...

We analyze the effects of lower bounds on wages, e.g., minimum wages or liability limits, on job design within firms. In our model, two tasks contribute to non-verifiable firm value and affect an imperfect performance measure. The tasks can be assigned to either one or two agents. In the absence...

An increasing number of workers participate in online labor markets. In contrast to traditional employment relationships within firms, the interaction between online workers and their employers are short and impersonal, which makes motivating online workers more challenging. We present results...

Incentives for managers are often provided by offering them performance-based compensation schemes. The efficiency of such monetary compensations, however, depends on several factors, among them the quality of the employed performance measures, the information available for contracting purposes,...