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Problem Of Ensuring Maximum Level Of Workers' Effort

Author

Listed:
  • Djuro Benic

    (University of Dubrovnik)

Abstract

One of the conditions of running business on the curve of long-term average cost is the insurance of a maximum worker's effort, which becomes very important when having in mind frequent interest clashes among workers, managers and company owners. The paper analyzes the principal-agent problem, i.e. the problem of a maximum workers' effort. The paper also examines how to use contracts, i.e. schemes and plans of compensations and payments that ensure for all the employees their maximum work effort. Stimulus systems, analyzed in cases of symmetric and asymmetric information, are particularly emphasized.

Suggested Citation

  • Djuro Benic, 2009. "Problem Of Ensuring Maximum Level Of Workers' Effort," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 18(1), pages 19-42, june.
    • Handle: RePEc:avo:emipdu:v:18:y:2009:i:1:p:19-42
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    More about this item

    Keywords

    principal; agent; incentive systems; symmetric and asymmetric information;
    All these keywords.

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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