Which of the following conditions have been shown necessary for a ratchet effect to operate in an incentive system?
A) There must be an entrenched minimum standard of performance.
B) A principle encouraging innovation must be implemented.
C) The minimum standard must go up or down with each innovation.
D) All of the above are necessary to the operation of a ratchet effect.

Question

Quizplus · Accepted Answer

The ratchet effect in incentive systems requires an entrenched minimum standard of performance that adjusts (upwards or downwards) with each innovation, alongside a principle that encourages innovation. This means all the listed conditions (A, B, C) are necessary components for the ratchet effect to operate, making D the correct choice.

Which of the Following Conditions Have Been Shown Necessary for a Ratchet