What happens to the piece rate if there is a ratchet effect?
A)The piece rate decreases over time.
B)The piece rate increases over time.
C)The piece rate is replaced with a time rate.
D)The piece rate is replaced with a salary contract.
E)The piece rate is only paid to the least productive workers.

Question

Quizplus · Accepted Answer

The ratchet effect refers to a situation where workers' performance improvements lead to higher expectations and potentially lower piece rates, as employers adjust the rates to maintain cost efficiency.

What Happens to the Piece Rate If There Is a Ratchet