Analysis of the incentive problems considering intrinsic motivation and multiple objectives of the agent

The agency theory has often been employed to discuss the incentive problems. In the standard models, the labourers have been assumed to devote their effort only to the objectives given by the organizations. However, in actual organizations, labourers seem to have individual objectives besides the ones assigned by the organizations. In this paper, a new model considering this individual objective is developed, and the question of how to provide incentives according to non-monetary productivity of the organizational and individual objectives is discussed. From the analysis, it is obtained that when the non-monetary productivity of the individual and the organizational objective are low, introducing the piece rate should be effective.