Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman

Exercise 15

The Green Shoe Company is considering going to a piece-rate system, where manufacturing employees are paid based on their level of output. Discuss what factors the firm should consider in deciding whether or not this idea should be implemented. How should the initial piece rate be set Under what circumstances should the company alter the piece rate once it is adopted