TY  - RPRT
        AU  - Sloof, Randolph
AU  - Praag, Mirjam C. van
        TI  - Performance Measurement, Expectancy and Agency Theory: An Experimental Study
        PY  - 2007/Sep/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 3064
        UR  - https://www.iza.org/index.php/publications/dp3064
        AB  - Theoretical analyses of (optimal) performance measures are typically performed within the realm of the linear agency model. This model implies that, for a given compensation scheme, the agent’s optimal effort is unrelated to the amount of noise in the performance measure. In contrast, expectancy theory as developed by psychologists predicts lower effort levels for noisier performance measures. We conduct a real effort laboratory experiment and find that effort levels are invariant to changes in the distribution of the noise term, i.e. to expectancy. This suggests that enriching the economic (linear agency) model commonly applied within this area by including an expectancy parameter is not needed.
        KW  - performance measurement
KW  - expectancy theory
KW  - real effort experiments
KW  - agency theory
KW  - personnel economics
        ER  -