To keep employees from shirking,you can invest in greater monitoring
A)even though monitoring is expensive
B)especially when monitoring is not very efficient
C)when employees fail to respond to incentive contracts
D)when incentives solve both moral hazard and adverse selection problems with employees

Question

Quizplus · Accepted Answer

Investing in greater monitoring is not always the most effective solution to ensure that employees do not shirk. In fact, it can be quite expensive and may even harm employee morale. Incentive contracts can be more effective in motivating employees to work hard and avoid shirking. However, if employees fail to respond to incentive contracts, then greater monitoring may be necessary to ensure that they are fulfilling their job responsibilities.

To Keep Employees from Shirking,you Can Invest in Greater Monitoring