You are hired by the Fair Work Commission Australia as a consultant to examine issues relating… 1 answer below »

You are hired by the Fair Work Commission Australia as a consultant to examine issues relating topay and performance. Your task is to provide a report detailing findings from theeconomic literature on theeffectiveness of pay for performance, and howperformance should be evaluated based on incentive pay.

In the economic literature, theEfficiency Wage Theories focus exclusively on therelationship between pay and performance. The Efficiency Wage Theories (EWT) maintain that firms should offer their employees a wage that isabove the market clearing rate. Paying employees awage premium raisesproductivity, workplace cohesiveness, employee responsibility and loyalty, and reduces shirking. Conversely, a wage that is below the prevailing market rate can contribute to employee dissatisfaction and other negative attitudes (e.g. outrage and a desire for revenge), and ultimately a high turnover.

·You should aim tothink critically andwrite originally.

·A key component of the assessment of the assignment will be based on your ability to explain your answers using theeconomic concepts and theory discussed in this unit. You will be rewarded for linking the theory with areal life example.

·You are required to research this topic. Use thereadings on “Efficiency Wages” (in LMS) to build up your essay.