For Work / Against Work
Debates on the centrality of work

"The Firm as an Incentive System"

by Holmstrom, Bengt; Milgrom, Paul (1994)


We explore the twin hypotheses (i) that high-performance incentives, worker ownership of assets, and worker freedom from direct controls are complementary instruments for motivating workers, and (ii) that such instruments can be expected to covary positively in cross-sectional data. We also relate our conclusions to empirical evidence, particularly that on the organization, compensation, and management of sales forces.


Firms, Incentive System, Empirical Study, Economics


Theory of the Firm

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