Question

16. Suppose a firm offers its senior employees protection from layoffs an added benefits.
Further assume that the firm is interested in workers whose ability or motivation is in
consistent with high productivity work. The firm will more than likely implement what
“scheme” to insure high effort applicants are hired or remain.
a. A probation period
b. Piece rate system
c. Performance bonds
d. All of the above
i) Which of these industry sectors is more likely to have little internal labor market
influence?
a. Retail sector
b. Highly competitive product markets
c. Public sector
d. None of the above

ii). Tournament theory implies
a. The firm offers better paying jobs as the “prize.”
b. Significant salary increases are necessary to stimulate promotion competition.
c. The winner of the tournament is the best worker among all workers in the
competition.
d. All of the above
iii). Which of the following is not considered fringe benefits
a. Life insurance
b. Salary
c. Medical insurance
d. Vacation time

Answer 1

1. d. All of the above

This is because all the schemes such as probation period, performance bonds will ensure that best workers could come in and sustain in the firm because the short tern check up nature of these schemes.

2. Highly competitive product markets

In such a market, the labour force keeps on changing and there will be lesser influence of the internal labour market.

3.  b. Salary

Fringe benefits are those which comes along with permanent incomes like salary and all. They are life insurances etc.