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What Happens Within Firms? A Survey of Empirical Evidence on Compensation Policies

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Author Info
Canice Prendergast
Abstract

with the compensation policies of firms. This literature is considered from the perspective of three major theories: human capital, learning, and incentives. Considerable empirical work has addressed each of these theories with some success. However, our understanding of the effect of compensation on behavior and of the motivations for firms in choosing certain policies has been constrained by two important problems. First, the absence of data on contracts and performance has limited the ability of researchers to ask even the most basic question, Do Incentives Matter? Second, the available theoretical work has not been sufficiently orientated towards distinguishing between plausible alternatives, so that many observed facts are consistent with any of the major theories.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5802.

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Date of creation: Oct 1996
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Handle: RePEc:nbr:nberwo:5802

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J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Marco Delmastro, 2002. "On the choice of incentives in firms: influence activity, monitoring technology and organizational structure," Economics Bulletin, Economics Bulletin, vol. 12, pages 1-13. [Downloadable!]
  2. Rajesh K. Aggarwal & Andrew A. Samwick, 1999. "Performance Incentives Within Firms: The Effect of Managerial Responsibility," NBER Working Papers 7334, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Felipe Balmaceda, 2002. "Compensation Methods in a Competitive Labor Market: the Role of Asymmetric Information," Documentos de Trabajo 139, Centro de Economía Aplicada, Universidad de Chile. [Downloadable!]
  4. Peter Egger & Doina Maria Radulescu, 2008. "Labour Taxation and Foreign Direct Investment," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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