Based on the literatures on the principal2agent problem , this paper proposes that the mechanism by which manager’s behavior determines managerial performance maybe is ignored by the trade. The study builds a model to describe manager’s dynamic behavior under the condition where the principal2agent contract has been linear between manager and stockholders , and where there is the lagging effects of manager’s endeavors on managerial perfor2 mance. Furthermore , this paper presents the optimal condition under which can contract manager’s behavior with managerial performance. The relationship between manager’s behavior and managerial performance is studied final2 ly.