Discussion - a reduced risk of error through an increase in...

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1. What does the following statement mean? Investment banking is a demanding profession; investment banks want the employees to work as hard as possible. Though investment banking is a demanding profession the employees are generally well compensated for their hard work, since it is value increasing for a firm to motivate an employee to work harder. However, when the marginal benefits from increased effort become equal to the marginal costs of the increased effort it is no longer in the firm’s best interest. 2. What are some costs and benefits of a 360 degree evaluation system? The costs of a 360 degree evaluation system general outweigh the benefits; such benefits would include
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Unformatted text preview: a reduced risk of error through an increase in knowledge by the evaluator, thereby reducing the risk borne by the one doing the evaluation. The costs on the other hand can lead to more time spent by coworkers lobbying for another leading to a sphere of influence, the incentives provided might not lead to honest reviews, and there is a lack of structure provided. Reference Brickley, J. A., Smith, C.W., & Zimmerman, J. L. (2009). Managerial Economics and Organizational Architecture Fifth Edition. New York: McGraw-Hill Irwin....
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