The Economics of Compensation

Catalog description

Designing efficient compensation contracts is important for attracting, retaining, and motivating talent. Through case studies, homework assignments, and classroom discussion, this course provides an overview of best compensation practices, and how they vary across industries, jobs, and countries. We discuss the economic trade-offs behind the compensation contracts used to reward talent across industries. As applications, we analyze the compensation schemes commonly used to attract and reward talent by startups, technology firms, hedge funds, professional service firms, entertainers, and professional athletes. The learning objectives of this course are: (1) to understand the overall structure and individual components of compensation schemes and the incentive role that each component plays, (2) to discuss the pros and cons of alternative performance measurement systems and ultimately 3) to help you implement an optimal compensation scheme tailored to the economic circumstances you confront.