The students acquire profound knowledge about the design and the impact of different incentive and compensation systems. Topics covered are, for instance, performance based compensation, team work, intrinsic motivation, multitasking, and subjective performance evaluations. We will use microeconomic or behavioral models as well as empirical data to analyze incentive systems. We will investigate several widely used compensation schemes and their relationship with corporate strategy. Students will learn to develop practical implications which are based on the acquired knowledge of this course.

Aim

The student

• develops a strategic understanding about incentives systems and how they work.
• analyzes models from personnel economics.
• understands how econometric methods can be used to analyze performance and compensation data.
• knows incentive schemes that are used in companies and is able to evaluate them critically.
• can develop practical implications which are based on theoretical models and empirical data from companies.
• understands the challenges of managing incentive and compensation systems and their relationship with corporate strategy.

Workload

The total workload for this course is: approximately 135 hours.

Lecture: 32 hours

Preparation of lecture: 52 hours

Exam preparation: 51 hours

Literature

Slides, Additional case studies and research papers will be announced in the lecture.

Literature (complementary):

Managerial Economics and Organizantional Architecture, Brickley / Smith / Zimmerman, McGraw-Hill Education, 2015

Behavioral Game Theory, Camerer, Russel Sage Foundation, 2003

Personnel Economics in Practice, Lazear / Gibbs, Wiley, 2014

Introduction to Econometrics, Wooldridge, Andover, 2014

Econometric Analysis of Cross Section and Panel Data, Wooldridge, MIT Press, 2010