Piece rates are typically a solution to the:
A) manager-worker, principal-agent problem.
B) manager-owner, principal-agent problem.
C) owner-worker, principal-agent problem.
D) None of the preceding statements is correct.

Question

Quizplus · Accepted Answer

Piece rates directly address the manager-worker, principal-agent problem by aligning the incentives of the worker (agent) with the goals of the manager (principal), encouraging workers to be more productive since their compensation is directly tied to their output.

Piece Rates Are Typically a Solution to The