Question

2. Many jobs could be paid according to the effort put in by the employee, which has experimentally been shown to be an excellent way to motivate hard work. Instead these jobs pay a fixed wage rate. What are two reasons related to social preferences why this might be the case? ___________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________

3. Other than the examples discussed in other questions on this worksheet, what are three examples you can think of in which social preferences change how businesses operate? Explain. ________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________

Answer 1

2. Although it is imperative to compensate the labour as per the productivity and hard work but at the same time there are certain social obligations and preferences which need to be considered while taking the decision of wage payment.

Therefore even after more hard work done by some at jobs and lesser efforts put in by some others are compensated equally and a fixed wage rate system is followed due to certain social preferences. some of them are cited below :

a.)Competition and cooperation : It is very much possible that differential wage payment foT the same job to different people on the basis of hard work and efforts might create feeling of enmity and develop unhealthy competition among workers.This may further lead to fall in productivity and negative work enviornment in the organisation.

b.)Gender bias : Sometimes wage payment needs to be kept fixed even after good amount of hard work and efficient working because of social status of a particular gender.

Males may not like to be paid lesser than Females for the same job even though their productivity is lower than the Females workers.also Males can not be paid higher to compensate their hard work due to equal remuneration policy of the legislature even their contribution is more.

so Social Preferences play a significant role in determination of wage payment.

3. Social Preferences might change business operations in a considerable manner.

Feeling of appreciation and self esteem is recognised as one of the key factor to boost business operations and enhanced efficiency level.

Safety and comforts of self and family provides a sense of security and satisfaction and acts as a motivation to all for striving hard to meet organisational goals.

Fulfilment of social resposibility as an corporation enables the organisation to put a forefront step in business enviornment and results in external economies.

Special