Piece rates are typically a solution to the

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Piece rates are typically a solution to the manager-worker, principal-agent problem. This is because piece rates align the incentives of the worker with the goals of the manager. When workers are paid based on the number of units they produce, they have an incentive to work harder and produce more output. This is beneficial for the manager, as it increases the productivity of the workforce and reduces the cost of production.

Piece Rates Are Typically a Solution to the