An increase in the likelihood of a dismissal:
A) raises productivity at an increasing rate.
B) raises productivity at a decreasing rate.
C) decreases productivity at a decreasing rate.
D) decreases productivity at an increasing rate.

Question

Quizplus · Accepted Answer

An increase in the likelihood of a dismissal initially raises productivity as employees work harder to avoid being fired. However, this effect diminishes over time as the pressure and stress associated with the fear of dismissal can lead to burnout, reducing the marginal increase in productivity. Thus, productivity increases at a decreasing rate.

An Increase in the Likelihood of a Dismissal