In some instances,profit sharing may not be a very effective tool for raising worker productivity because of the:
A)free-rider problem
B)principal-agent problem
C)retirement problem
D)tax and accounting rules that cause economic profit to differ from accounting profit

Question

Quizplus · Accepted Answer

The free-rider problem occurs when some workers do not contribute as much effort as others but still benefit from the profits earned from the collective efforts. This can discourage individual productivity and may cause resentment among workers who feel that they are carrying a disproportionate workload. Profit sharing may not be an effective tool for raising productivity in this scenario.

In Some Instances,profit Sharing May Not Be a Very Effective