A large literature, both theoretical and empirical, suggests that incentive pay and the delegation of worker authority are positively related. Using data from a large cross section of British establishments, we show that the positive relationship that has been consistently found in the empirical literature masks a stark di fference between job types. Classifying jobs into two categories (complex jobs, including professional, technical and scientific occupations, and simple jobs, consisting of all other non-managerial occupations) we find that for simple jobs, the relationship is positive, whereas for complex jobs it is negative. To explain this negative relationship, we develop a model where tasks have a risk-return tradeoff and where a single performance measure must induce both task selection and e ffort. We fi nd that if tasks vary sufficiently by risk and return, and if output is a noisy measure of e ffort, then delegation and incentives have a negative relationship.