The Performance Contracting Concept, Appendix: A Critique of the Theory

Abstract

THIS TECHNICAL APPENDIX summarizes the major theoretical articles bearing on the theory of performance contracting. No general, definitive statement of that theory has been found, but most of the major elements of the theory are presented. Two especially pertinent contributions are reviewed: "A Formal Theory of the Employment Relationship," an article by H. A. Simon, and Optimal Rewards in Incentive Systems, a Ph.D. dissertation by C. N. Yowell, Jr. These analyses could provide a foundation for a fully articulated theory of performance contracting. All the other articles reviewed are concerned with the theory of incentives for cost reduction. This theory, usually discussed in the context of the Federal Government and defense contractors, is simply a specialization of the general theory of incentives, and several of its assumptions are so restrictive that they severely limit its application to most performance contracting situations.

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Document Details

Document Type
Technical Report
Publication Date
May 01, 1971
Accession Number
ADA483996

Entities

People

  • James P. Stucker

Organizations

  • RAND Corporation

Tags

DTIC Thesaurus Topics

  • Abstracts
  • Availability
  • Classification
  • Contractors
  • Contracts
  • Corporations
  • Cost Reductions
  • Costs
  • Employment
  • Governments
  • Information Operations
  • Instructions
  • Monitoring
  • Motivation
  • Organizational Structure
  • Security
  • Specialization

Readers

  • Government Contracting/Procurement.
  • Mathematical Modeling and Probability Theory.
  • Systems Analysis and Design