PROBLEM OF ENSURING MAXIMUM LEVEL OF WORKERS' EFFORT

Djuro Benic ()
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Djuro Benic: University of Dubrovnik

Economic Thought and Practice, 2009, vol. 18, issue 1, 19-42

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.

Keywords: principal; agent; incentive systems; symmetric and asymmetric information (search for similar items in EconPapers)
JEL-codes: J33 (search for similar items in EconPapers)
Date: 2009
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