In management, incentives are a reward to motivate people and create favorable conditions directed to achieve specific goals and support organizational development. This conceptual paper analyses differences between intrinsic and extrinsic incentives to suggest management implications directed...

Research suggests that restricted labor mobility discourages managers from investing in human capital and reduces firm value. However, whether firms re-incentivize managers to mitigate its adverse effects remains unexplored. We find that after the adoption of the inevitable disclosure doctrine...

I develop a principal-agent model where a profit-maximizing principal employs two agents to undertake a project. The employees differ in terms of their intrinsic motivation towards the project and this is their private information. I analyze the impact of individual and team incentives on the...

We propose an intuitive and simple-to-implement empirical classification of management models, based on whether agency issues are tackled by hierarchical monitoring or incentive contracts. The analysis of granular data from a large sample of Italian private firms reveals that the adoption of...

This paper studies how pay transparency affects organizations that reward employees based on their efforts (i.e., using “subjective performance evaluation”). First, we show that transparency triggers social comparisons that require the organization to pay its employees an “envy premium”....

This paper examines the use of key employee retention and incentive plans (KERPs) in bankrupt firms. We find that firms in Chapter 11 are more likely to offer KERPs when firms are located in thicker employment markets, when creditors have strong control, and when bankrupt firms have complex...

We address the question how much authority a principal should delegate to a manager with conflicting interests and uncertain ability in a context in which the manager has both compensation-based and reputational incentives. The optimal level of authority balances the value of the manager's...

Arguably the fundamental problem faced by employers is how to elicit effort from employees. Most models suggest that employers meet this challenge by monitoring employees carefully to prevent shirking. But there is another option that relies on heterogeneity across employees, and that is to...

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-veriable firm value and affect an imperfect performance measure. The tasks can be assigned to either one or two agents. In the absence...

We investigate a team setting in which workers have different degrees of commitment to the outcome of their work. We show that if there are complementarities in production and if the team manager has some information about team members, interventions that the manager undertakes in order to...