report detailing findings from the economic literature on the effectiveness of pay for performance, and how performance should be evaluated based on incentive pay.

Research Project Topic

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

In the economic literature, the Efficiency Wage Theories focus exclusively on the relationship between pay and performance. The Efficiency Wage Theories (EWT) maintain that firms should offer their employees a wage that is above the market clearing rate. Paying employees a wage premium raises productivity, 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 to think critically and write originally.

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

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

Discussion Notes

Report Structure: (Full Version)

· Content Page

· Introduction: description of the intent of this report and how to go about it

· Section A: Background of the organization Fair Work Commission Australia (check its website) to get some general background about this Australia governmental agency - confined to 150 words or less.

Write about its objectives, goals and basic functions. And of course the purpose and reason of producing this report. (remember that you are engaged by this agent to produce the report.)

· Section B and with sub-sections like B.1, B.2 and so on: on literature review on key ideas, concepts and theories relating to General Labor Supply, Backward Bending SS Curve, Efficiency Wage Theory (more effort on this), and Pay - Performance Structure. This requires rigorous references of research articles, news paper write out and also those articles (emphasis should be given to UC's paper on Efficiency Wage Theory) posted at LMS. Key concepts are mainly found in these articles and a bit of lecture supplement notes. (Preferable 1200 to 1500 words)

· Section C and with sub-sections like C.1, C.2 and so on: relate those key concepts discussed in section B that can be applicable to a specific firm, case or situation (preferably in Singapore context) and discuss how these ideas and concepts can be used here and some issues (some usefulness as well as some possible problems) can be encountered while implementing a Efficiency Wage and Pay Performance structure based on the conceptual framework proposed here. (preferably 300 to 500 words)

· Section D: a brief recommendations and comments (100 to 300 words)

· Conclusion (about 100 words)

· Appendices: (No word count) (No need to submit in soft copies)

-- References

-- Tables, Charts, Stats, Data info, graphs and others

-- Others

Background preparation:

· Read and understand those hand written notes from the UC (pdf files at LMS, 42 pages) about how to write this paper: especially on the Labor Supply Curve, Backward bending Curve, and Theory emphasized there, also his article, plus "Efficiency Wage" Theory (Should emphasise on this) emphasized by the UC.

· You may like to decide to adopt one of the two approaches recommended by the UC in his hand written notes (42 pages)

· Read those academic articles written by the UC and others posted at LMS. Derive those key ideas, concepts and theories on EWT there.

· Read lecture notes on all topics and give greater effort on Topic 3 Labor Supply and Backward Bending Curve.

· key Ideas & concepts:

· General aspects of labor supply

· Efficiency Wage Theory - refer to LMS

· Concepts, ideas and theories: pay more attention to those aspects of Efficiency Wage Theory relating to productivity, workplace cohesiveness, employee responsibility and loyalty, and reduces shirking.

· Argue persuasively and critically why paying a higher wage rate based on EWT can be effective in raising up the above measures like productivity and others

· Argue persuasively and critically why NOT paying a higher wage rate based on EWT may NOT be effective in raising up the above measures like productivity and others

· Application to a firm under discussion: relate how those ideas, concepts and theories of "Efficiency Wage Theory" (EWT): can be applied and its effectiveness in this real life context of this firm. The firm chosen must be a real life case.

Kaplan BUS 301 Module: Individual Essay Paper Mark Sheet

	Student ID	Student Names

	Criteria	Allotted Marks	Actual Marks	Remarks
1	Executive Summary, Introduction, Overview and Conclusion	10.0
2	Application 0f Concepts, Theories and Basic Principles	30.0
3	Critical Thinking, Reasoning & Analysis, Structural and Systematic Approach	30.0
4	Data, Information Gathering, Tables, Graphs and /or Statistics	20.0
5	Overall Format, Presentation, Referencing and Appendices	10.0
	Total	100.0

Overall Comments & Remarks

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