Managers can set explicit, binding targets to reward workers before observing their performance (ex ante contract), or decide whether to reward workers after observing their performance (ex post contract). We experimentally examine the effects of the two types of contracts on workers' behaviors...

Managers often face the choice between promoting an internal employee and hiring an external candidate. Using an incentivized experiment, we examine managers’ promote/hire decision and employees’ behavior before and after that decision in a setting in which the external candidate has...