What prevents a firm from offering a delayed-compensation scheme to its employees and then firing each worker when the worker's wage exceeds his or her value of marginal product?
A)Firms that offer delayed-compensation schemes are legally barred from firing workers.
B)Profits would increase by allowing the worker to continue on.
C)The worker will have already retired by the time the worker's value of marginal product exceeds his or her wage.
D)The firm would lose the trust of the workers, and new workers would not accept the payment scheme.
E)Profits are insensitive to when the worker quits his job.

Question

Quizplus · Accepted Answer

If a firm fires workers when their wage exceeds their value of marginal product, it would lose the trust of current and potential employees, making it difficult to attract and retain talent.

What Prevents a Firm from Offering a Delayed-Compensation Scheme to Its