The Optimal Design of Hotel Staff Incentive Compensation Contract under Turnover Rate

In this article, assuming the output of staff can be observed, we construct the principal-agent incentive model between staff and hotel based on utility maximization. The optimal incentive contract including staff turnover rate are respectively constructed under two cases: the staff's effective working time is symmetric information and asymmetric information. Then, it is discussed that how the turnover rate affects the incentive contract and the enthusiasm of staffs.