In October 2026, NBER’s bulletin circulated an updated abstract of Beliefs Over Contracts by Francis Annan and Collin B. Raymond. The research compares managers’ expectations with experimental incentive-contract performance and reports difficulty anticipating the strongest arrangement.

The full linked October manuscript was unavailable for this review. Numerical effects are omitted, and the discussion should be read as a preliminary working-paper insight rather than a verified prescription for a particular pay structure.

Test the forecast as well as the reward

A rewards committee could ask managers to record what they expect a proposed incentive to change before implementation. The record should identify the population, objective, observation period and possible unintended responses. That would create a basis for comparing confidence with subsequent evidence.

The employer should separate the intended business outcome from the indicator used to calculate a payment. It should also examine whether communication, support and opportunities to earn differ across participants. These are proposed evaluation questions, not additional findings from the research.

Preserve the local decision boundary

Employee understanding and fairness should have explicit places in the review. Feedback can help identify uncertainty about the arrangement, while an assessment of different roles and circumstances can test whether the opportunity is appropriate. Neither exercise substitutes for a suitable comparison of outcomes.

For global compensation and benefits teams, the transferable idea is to document predictions and seek contrary evidence. A result from a particular field setting should not be assumed to apply to a multinational bonus plan or benefits programme.

One practical next step is a prediction-and-review protocol for a forthcoming rewards decision, with safeguards, an evaluation date and an accountable owner. Detailed numerical reporting should wait until the relevant full manuscript and version can be verified.

That evidence boundary should remain visible in any subsequent editorial use of the study.

Sources

NBER Working Paper 35788

An incentive-contract study challenges managers’ predictions of rewards performance

NBER research bulletin

The Latest NBER Research — Francis Annan | October 2026 manuscript link verified.

Author research page linking October 2026 manuscript