TY  - JOUR
AU  - Prendergast,Canice
TI  - What Happens Within Firms? A Survey of Empirical Evidence on Compensation Policies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5802
PY  - 1996
Y2  - October 1996
UR  - http://www.nber.org/papers/w5802
L1  - http://www.nber.org/papers/w5802.pdf
N1  - Author contact info:
Canice Prendergast
Graduate School of Business
The University of Chicago
1101 E. 58th Street
Chicago, IL 60637
Tel: 773/702-9159
Fax: 773/702-2699
E-Mail: canice.prendergast@ChicagoBooth.edu
M1  - published as Canice Prendergast. "What Happens within Firms? A Survey of Empirical Evidence on Compensation Policies," in John Haltiwanger, Marilyn E. Manser and Robert Topel, editors, "Labor Statistics Measurement Issues" University of Chicago Press (1998)

AB  - 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.
ER  -