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The Provision of Incentives in Firms

The Provision of Incentives in Firms Abstract This paper provides an overview of the existing theoretical and empirical work on the provision of incentives. It reviews the costs and benefits of many types of pay-for-performance, such as piece rates, promotions, and long-term incentives. The main conclusions are (i) while there is considerable evidence that individuals respond to pay-for-performance, there is less evidence that contracts are designed as predicted by the theory, (ii) there has been little progress made in distinguishing amongst plausible theories, and (iii) we still know little about how incentives are provided to workers whose output is difficult to measure. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economic Literature American Economic Association

The Provision of Incentives in Firms

Journal of Economic Literature , Volume 37 (1) – Mar 1, 1999

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References (207)

Publisher
American Economic Association
Copyright
Copyright © 1999 by the American Economic Association
Subject
Articles
ISSN
0022-0515
DOI
10.1257/jel.37.1.7
Publisher site
See Article on Publisher Site

Abstract

Abstract This paper provides an overview of the existing theoretical and empirical work on the provision of incentives. It reviews the costs and benefits of many types of pay-for-performance, such as piece rates, promotions, and long-term incentives. The main conclusions are (i) while there is considerable evidence that individuals respond to pay-for-performance, there is less evidence that contracts are designed as predicted by the theory, (ii) there has been little progress made in distinguishing amongst plausible theories, and (iii) we still know little about how incentives are provided to workers whose output is difficult to measure.

Journal

Journal of Economic LiteratureAmerican Economic Association

Published: Mar 1, 1999

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