A particularly challenging aspect of directing employee effort is inducing employees to make decisions in line with organizational objectives. The first step is for management to determine who will decide what. Decisions should be made by individuals who have both the relevant information and the incentives to use the information productively. Therefore, decision rights should be assigned in a way that effectively links decision-making authority with the information needed to make good decisions; and at the same time, the systems of evaluating and rewarding employee performance should provide decision makers with incentives to make value-enhancing decisions. Scholars refer to the coordination of these three ...
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