This paper, originally written in 1982, explores how a person's concern for their future career can influence their incentives to work hard or make decisions on the job. The author, Bengt Holmstrom, models the person's productive abilities as revealed over time through observations of performance, without explicit output-contingent contracts. Instead, wages are based on expected output, which depends on assessed ability, creating an "implicit contract" linking current performance to future wages. The paper highlights the fundamental incongruity between the individual's concern for human capital returns and the firm's concern for financial returns, which can be beneficial or detrimental depending on how well these returns align. Holmstrom discusses the impact of time on incentives, noting that while it can help police moral hazard by allowing more observations and accurate inferences, it can also create problems. He presents a model to analyze the manager's decision to supply labor, showing that the optimal labor supply is influenced by the degree of uncertainty about ability and the precision of information. The paper also examines the implications of reputation on managerial risk-taking, arguing that career concerns can lead to a genuine incongruity in risk preferences between the manager and the firm. The paper concludes by discussing the dynamic perspective on incentive issues, emphasizing that contracts will still play an important role even in multi-period models. Regarding investment incentives, Holmstrom notes that dynamics can make the problem more severe, as time can create more incentive costs rather than reducing them.This paper, originally written in 1982, explores how a person's concern for their future career can influence their incentives to work hard or make decisions on the job. The author, Bengt Holmstrom, models the person's productive abilities as revealed over time through observations of performance, without explicit output-contingent contracts. Instead, wages are based on expected output, which depends on assessed ability, creating an "implicit contract" linking current performance to future wages. The paper highlights the fundamental incongruity between the individual's concern for human capital returns and the firm's concern for financial returns, which can be beneficial or detrimental depending on how well these returns align. Holmstrom discusses the impact of time on incentives, noting that while it can help police moral hazard by allowing more observations and accurate inferences, it can also create problems. He presents a model to analyze the manager's decision to supply labor, showing that the optimal labor supply is influenced by the degree of uncertainty about ability and the precision of information. The paper also examines the implications of reputation on managerial risk-taking, arguing that career concerns can lead to a genuine incongruity in risk preferences between the manager and the firm. The paper concludes by discussing the dynamic perspective on incentive issues, emphasizing that contracts will still play an important role even in multi-period models. Regarding investment incentives, Holmstrom notes that dynamics can make the problem more severe, as time can create more incentive costs rather than reducing them.