To pay piece rates in order to elicit effort, it must be the case that
A) the firm can monitor individual worker output.
B) workers refuse to accept a time rate.
C) firms cannot monitor individual worker effort.
D) the production process relies on group work.
E) the firm does not want to maximize profits.

Question

Quizplus · Accepted Answer

Piece rates are effective when a firm can monitor individual worker output, allowing it to pay workers based on their productivity. This system incentivizes effort by directly linking pay to output.

To Pay Piece Rates in Order to Elicit Effort, It