Question
A branch manager lays off experienced full-time employees and staffs customer service positions with part-time or temporary workers to lower employment costs and raise this
A branch manager lays off experienced full-time employees and staffs customer service positions with part-time or temporary workers to lower employment costs and raise this year's branch profit. The manager's bonus is based on profitability. Which of the following statements correctly identifies the cost and possible solution for the agency problem in this case?(Choose all correct responses.) A. Generally part-time or temporary workers are not as productive as full-time employees. These workers have not been on the job as long to increase their work efficiency. B. This manager is getting rid of good employees to increase short-term profits. C. One approach to reducing the problem would be to give the manager performance share if certain stated goals are met. D. Implementing a stock incentive plan tying management compensation to share price would also encourage the manager to retain quality employees.
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