Why do many firms base incentive pay on group performance?
What will be an ideal response?
There are several advantages for setting up group incentive plans. Group performance is easier and cheaper to measure than individual performance. Group pay encourages team work and mutual cooperation based on team members self-selecting into tasks based on their skills. Group work also limits free-riding since each person can monitor others. Group work also retains employees, and gives them confidence about tenure. Group performance also reduces contracting costs since groups' compensation can be adjusted based on opportunity costs.
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The aggregate production function shows how ________ varies with ________
A) leisure time; labor B) labor; leisure time C) real GDP; labor D) labor; capital
An outward shift of a nation's production possibilities frontier can occur due to
A) a natural disaster like a hurricane or bad earthquake. B) a change in the amounts of one good desired. C) an increase in the labor force. D) a reduction in unemployment.