Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Incentive schemes serve not only to determine an employee's level of effort, but also to determine the choice of tasks to which the employee decides
Incentive schemes serve not only to determine an employee's level of effort, but also to determine the choice of tasks to which the employee decides to allocate her time and effort. A well-tailored incentive scheme should strive, therefore, to ensure not only that the employee's overall level of effort is high, but also that she directs her attention toward the tasks that will maximize the returns to the firm. For example, an incentive scheme that rewards teachers based upon the scores received by their students on standardized tests. Such an incentive scheme can have the unintended effect of motivating instructors to spend more time teaching material that will be tested, while spending less time teaching creative, mind-enriching subjects that, while not tested, may prove more beneficial in the long run
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started