Suppose y is a "performance indicator" for an enterprise. As examples, y might stand for output, profits, cost savings, orfactor productivity. With standard piecework reward systems the manager of an enterprise will try to convince his superiors that y is likely to be small, thereby entitling him to a lower target which is easier to fulfill. A new reform in the Soviet economy is aimed at stimulating more ambitious plans by making the bonus size depend on the plan target as well as the degree to

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... which it has been fulfilled. This novel incentive scheme is modelled in the present paper and its basic properties are analyzed. Some applications and extensions are proposed.