Compensation, Incentives & Organizations

1.5 units

This course is the second in a linked sequence looking at the study of the economics and management of organizations, and focuses on issues at the individual employee level. We will use the tools developed in MEC 500D, Economics of the Organization, to examine how incentives and performance contracts should be combined in an organizational framework to motivate executive and employee performance. In this course we consider the economic incentive problems faced by a firm in recruiting, training, motivating, and retaining workers in the firm's internal labor market, as well as economic tools which may be used to construct compensation and non-compensation schemes to address these incentive problems and raise worker productivity The format of the course is to present the underlying theory or framework for the topic at hand, and then to illustrate how a firm was able (or unable) to implement the recommended approaches for solving the incentive problem.