Scandinavian Working Papers in Economics

Discussion Papers on Economics,
University of Southern Denmark, Department of Economics

No 20/2014: Multitasking and performance measurement

Niels Nannerup () and Kasper Krogh Olsen ()
Additional contact information
Niels Nannerup: Department of Business and Economics, Postal: University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark
Kasper Krogh Olsen: Department of Business and Economics, Postal: University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark

Abstract: In a principal-agent setting, we consider a combined problem of multitasking and performance measurement. The principal can choose to reward the agent both directly for providing effort into a specific activity, and based on the outcome delivered to the principal. Both the issue of multitasking and any private knowledge the agent might possess will lead the principal to use a performance measurement more. This applies even if the measurement is poorly correlated with the actual outcome to the principal.

Keywords: Multitasking; pay for performance

JEL-codes: D82; D86; L51

22 pages, December 16, 2014

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