employee's performance was poor. The justification assures the employee that the manager has not distorted the evaluation …? Suppose a manager's evaluation is private information. Justifying her evaluation is costly but limits the principal's scope … for distorting her evaluation of the employee. I show that the manager justifies her evaluation if and only if the …

evaluation to the agent if the evaluation turns out to be bad. The justification assures the agent that the principal has not … her evaluation. For good performance, however, the principal pays a constant high wage without justification. Furthermore …Should principals explain and justify their evaluations? In this paper the principal's evaluation is private …

possesses no capital and enjoys limited liability, so cannot be sold the project. The optimal long-term contract involves … impact of hiring an expert, and show how the optimal contract changes when the expert has initial capital, can be replaced …

optimal contract with a strikingly simple closed form — that efficiently motivate the same productive action. Because … incentives can be embedded in the measure or the contract, any distortions in one are offset by adjusting the other, which can …

choice is more accurate than a noisy public performance measure. For some contingencies the optimal contract has to specify … the loss from termination is small. Under an optimal contract the agent's wage may depend only on the principal's report … and not on the public signal. Nonetheless, public information is valuable as it facilitates truthful subjective evaluation …