1. Start this exercise by completing the above calculations.
2. Which scheme would George probably prefer? Why?
3. Which scheme would the firm probably prefer? Why?
4. If they would prefer different approaches, how would you resolve the situation?
5. Is it always necessary to use some sort form of incentive scheme, or is sometimes a straight salary approach the best option?
6. If different, is there another scheme more suitable to meeting the needs of both parties?