Employees at Xeta Inc are divided into teams and each team is ...

[washai]

Employees at Xeta Inc are divided into teams and each team is then assigned work. However, the management often finds it difficult to measure the level of effort each worker provides as the output is generated by the team as a whole.
 
  What can the management do to motivate workers to refrain from shirking?

Question 2

How can you calculate the cost per mile of owning a car?
 
  A) Divide total costs per year of owning the car by the number of miles driven in a year.
  B) Divide total costs per year of owning and operating the car by the number of miles driven in a year.
  C) Divide total costs per year of operating the car by the number of miles driven in a year and add the result to the cost of owning the car.
  D) You cannot do so in any defensible way because cars are owned per unit of time period, not per unit of distance.

[potomatos]

Answer to Question 1

Employees often shirk from their responsibilities when they cannot be individually held accountable for their behavior. This is the case in Xeta Inc. Such behavior is known as moral hazard. Moral hazard occurs in the labor market when employees make decisions or take actions based on their private information that is unavailable to the employers.
However, if the company provides efficiency wages to its employees, they are likely to exert more effort. Efficiency wages are wages above the lowest pay that workers would accept that employers use to increase workers' motivation and productivity.

Answer to Question 2

D

[washai]

Thanks for the timely response, appreciate it

[ricroger]

TYSM