Question

Explain why a newly hired worker at a firm that operates in a competitive environment could be satisfied with getting paid much less than her productivity during her first month while she gets general training. Explain why she might be less satisfied with this situation if the training is specific to the firm.

Answer 1

A newly hired worker at a firm that operates in a competitive environment could be satisfied with getting paid much less than her productivity during her first month because she is getting general training in this period. Training will help her gaining more knowledge about the industry and will sharpen her skills. After gaining training, she will get more competent and when she will apply for job in some other industry, she will be able to get high paid job. Training will help her in getting high paid job in future that is why she is satisfied with being paid less in her first month while getting training.

However, of the training is specific to the firm, she will be less satisfied because all the knowledge she will gain through training will be applicable in the current firm and she will not be able to use the knowledge in getting high paid job in some other firm. When training is specific to the firm, she will only be learning the whereabouts of the firm and will not get general training of the entire Industry.

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