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According to the labor discipline model, if a firm could perfectly and costlessly monitor employee effort, it would still need to pay a wage premium to prevent shirking.
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Incentivizing Effort at Competing Firms
A technology company is experiencing issues with programmers not putting in their full effort on complex coding tasks. To address this, the company raises all programmer salaries to be 20% higher than the industry average. Which of the following statements best analyzes the fundamental reason this policy is expected to reduce shirking?
According to the labor discipline model, if a firm could perfectly and costlessly monitor employee effort, it would still need to pay a wage premium to prevent shirking.
Impact of Social Safety Nets on Wage Premiums
Critique of a Policy Proposal