Research and design of incentive mechanism for managers

Abstract

Mathematical analysis method is utilized to design incentive mechanism for managers under the asymmetric information as well as monitoring system analysis method, as a result of expanding the framework of incentive mechanism. The result shows that, there is a relationship between monitoring mechanism and incentive mechanism. They can motivate or direct managers to work hard and interchangeable by the other one. As a result, it is necessary to consider both monitoring mechanism and incentive mechanism when organization makes the reward system. With the development of monitoring mechanism, it not only has an innovative theory, but also has a great worth in practice.