Monday, February 24, 2020

Efficiency and Effectiveness in Relation to Pay Systems Essay

Efficiency and Effectiveness in Relation to Pay Systems - Essay Example This essay stresses that a perfect equilibrium is achieved when demand equals supply thus implying that everyone who is willing and able to work is working at that level of pay. If there are more people looking for employment, the pay will go down. This is because employers’ demand more people as wages goes down hence reducing unemployment. Therefore, this theory argues that if the pay is allowed to move up and down, it is an effective signal to the market and it will contribute to economic stability. This paper makes a conclusion that an efficiency wage system gives employers the ability to choose and pick among numerous applicants in order to get the best ones possible. The second factor that prompts managers to adopt efficiency pay system is intention to avoid shirking. Firms may frequently find it difficult to measure the quality and quantity of efforts of a particular worker because the systems of commissions or piece rates may prove impossible and therefore there is a possibility of the employee to do less work than agreed (shirking). As a result, the firm may decide to pay an efficiency wage with an aim of increasing or creating the cost of job loss thereby giving a sting to job firing threat. Threat such as this can be used to avoid moral hazard or shirking. Thirdly, sociological factors have been cited in relation to efficiency wages; these wages may be because of the firm’s traditions. Akerlof and Yellen argue that the firm may have been using this system to enhan ce high morale among employees thus raising productivity.

Saturday, February 8, 2020

The Merits of Privatization Research Paper Example | Topics and Well Written Essays - 500 words

The Merits of Privatization - Research Paper Example tes, transcontinental railroad constructed by public and private partnerships during the nineteenth century is one of the earliest examples of privatization in the US. The transcontinental public private partnership is always cited as an example by the people who support privatization. Privatization not only brings efficiency but it also helps in curtailing costs and reduces bureaucracy. (Loulakis, 2003) The recent financial downturn and government bailouts have severely affected the American economy. With the government deficits and costs of borrowing increasing day by day, many leading economists have advocated privatization of government functions which would bring budgetary discipline and would reduce government’s financial burden. Though the consumers are greatly benefited by the reduction in the costs of goods and services due to privatization, the only point which may negatively affect the citizens is accountability. Citizens do not have any control over private companies and cannot punish them, like they can punish the government by not voting for them in state or central elections. Another point of concern with privatization is that private firms operate with only one motive that is profitability, which is secondary in government owned and operated firms. Though, privatization has greatly improved product quality and cost, there are certain services which should not be privatized. Sectors like defense, law enforcement, education and basic healthcare should always be under State control. The future of the country depends a lot on the above mentioned sectors and therefore, the motive of cost cutting, profitability and competition should not come into consideration. However, certain functions like sourcing of certain products can be outsourced. Another reason why these sectors should be under State control is because in case of any adverse events the government must have the capacity and the control to handle the situation quickly and