Variable pay, defined as pay that is tied to some measure of a firm's output, has become more important for executives of the typical American firm. Variable pay is usually touted as a way to provide incentives to managers whose interests may not be perfectly aligned with those of owners. The...

This paper reports on a two-tiered experiment designed to separately identify the selection and effort margins of pay-for-performance (P4P). At the recruitment stage, teacher labor markets were randomly assigned to a pay- for-percentile or fixed-wage contract. Once recruits were placed, an...

This paper reports on a two-tiered experiment designed to separately identify the selection and effort margins of pay-for-performance (P4P). At the recruitment stage, teacher labor markets were randomly assigned to a 'pay-for-percentile' or fixed-wage contract. Once recruits were placed, an...

Success of an organization is generally based on the efficiency of its human resource. Organizations consider their employees as an important tool for survival in this globalized era. Hence, retaining the best employees is of high concern for most organizations and this issue has become a...