This course uses the tools and frameworks of microeconomics to analyze how firms incentivize their employees. We build on the premise that maintaining a competitive advantage depends on how well firms execute their strategy in the product market, which in turn hinges on the firm’s internal organization and how the workforce is recruited and motivated. The course analyzes the design of individual and team-based incentives (e.g. bonuses, stock options) and considers the challenges and opportunities in using various types of incentives to motivate and reward employees and executives. In so doing we will examine the actual compensation packages designed by a number of different companies in a wide range of industries, and apply our conceptual framework to discuss and understand their decisions. We will also study non-monetary incentives and apply our frameworks to incentive design in the not-for-profit sector.