Question

Isidora likes the results obtained when the employees at her small pharmaceutical company work in teams. Unfortunately, Javier, undeniably the most talented researcher in the firm, feels he is not being recognized or sufficiently compensated for his contributions within the team framework, and Isidora realizes that he is probably right. How can Isidora structure salaries to encourage teamwork, while retaining top performers like

Javier?
Multiple Choice
a. begin paying each employee the same hourly wage
b. base employee wages on the performance of each individual team
c. base employee wages on the performance of all the teams in the firm
d. pay each individual based on his or her individual performance
e. combine individual and team performance when determining wages

Answer 1

Isidora should opt for a wage system that balances individual and team performance to ensure that employees like Javier feel appreciated for their individual contributions while retaining the benefits of teamwork.

Step-by-step explanation:

Isidora should combine individual and team performance when determining wages. This approach allows for recognition of individual contributions like those of Javier, while still promoting the teamwork that has proven effective in her pharmaceutical company. Efficiency wage theory supports this system as it suggests that paying employees slightly more based on their productivity can lead to increased motivation and reduced turnover.

Implementing a structured compensation plan which considers both the performance of the individual and the team fosters a balanced work environment where collaboration and individual excellence are both rewarded. This motivation can maximize overall productivity and company profits, by maintaining high achievers like Javier, who may otherwise feel undervalued in a strictly team-based compensation structure.