_____ theory argues that performance-based pay is the optimal compensation choice for complex jobs, where monitoring employee performance is difficult.
A)Reinforcement
B)Goal-setting
C)Agency
D)Expectancy

Question

Quizplus · Accepted Answer

The agency theory argues that in complex jobs where monitoring employee performance is difficult, performance-based pay is the optimal compensation choice. This is because employees are more likely to work harder and be more motivated by monetary incentives when they are not being closely monitored. Performance-based pay creates an agency relationship between the employer and employee, where the employee is incentivized to act in the best interest of the employer to maximize their own compensation.

_____ Theory Argues That Performance-Based Pay Is the Optimal Compensation