The rate at which an employer provides an incentive for an employee to perform (to increase effort) is the:
A) informativeness principle.
B) incentive coefficient.
C) risk sharing premium.
D) efficient bargaining solution.

Question

Quizplus · Accepted Answer

The rate at which an employer provides an incentive for an employee to perform is called the incentive coefficient. It refers to the degree to which a worker's compensation is contingent upon their level of performance. A higher incentive coefficient implies that the worker's pay is more closely tied to their performance.

The Rate at Which an Employer Provides an Incentive for an Employee