As the owner of a business that sells alarm clocks, I want to hire workers who will sell as many of these clocks as possible. If I perceive the moral hazard to be strong among my sales employees, what could I do to minimize it?

Question

Quizplus · Accepted Answer

Paying employees a percentage of their sales creates an incentive for them to sell more and discourages them from engaging in moral hazard since their income is directly tied to their performance. This aligns the employee's interests with the business owner's interests, which results in increased sales and revenues.

As the Owner of a Business That Sells Alarm Clocks