Question
Describe how a manager who derives satisfaction from both income and shirking allocates a 10-hour day between these activities when paid an annual, fixed salary
Describe how a manager who derives satisfaction from both income and shirking allocates a 10-hour day between these activities when paid an annual, fixed salary of $95,000. Time spent working: hours Time spent shirking: hours When this same manager is given an annual, fixed salary of $95,000 and 3 percent of the firms profitsamounting to a total salary of $125,000 per yearthe manager chooses to work 8 hours and shirks for 2 hours. Given this information, which of the compensation schemes does the manager prefer? The manager is indifferent between the two payment schemes. The scheme with fixed payment of $95,000 and a percentage of profits.
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