Journal of Northeastern University ›› 2010, Vol. 31 ›› Issue (7): 1043-1045.DOI: -

• OriginalPaper • Previous Articles     Next Articles

Optimal design of team incentive mechanism based on principal-agent theory

Wang, Yan-Mei (1); Zhao, Xi-Nan (1); Wang, Gao-Nan (2)   

  1. (1) School of Business Administration, Northeastern University, Shenyang 110004, China; (2) School of Mechanical Engineering, Tsinghua University, Beijing 100084, China
  • Received:2013-06-20 Revised:2013-06-20 Online:2010-07-15 Published:2013-06-20
  • Contact: Wang, Y.-M.
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Abstract: Based on the principal-agent theory, a relevant model was developed for a team to study the optimization of team incentive mechanism, where the team included a principal and n agents. Solving the model to acquire the influencing factor on incentive to the members of the team, how the competence, attitude toward risks and team spirits of a team member, as the influencing factors, affect the incentive to him/her was discussed. The results showed that the relative incentive intensity or motive force among those members is decided jointly by the three factors as above. The higher the competence of a member, the lower the risk he/she will run and the stronger the motive force to push him/her. Moreover, the manager shall minimize the incentive gap between different members if the team spirit is high as a whole.

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