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Firms adopting "profit-related-pay"(PRP) contratcs

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Firms adopting "profit-related-pay"(PRP) contratcs  [#permalink]

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New post 01 Sep 2018, 10:12
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Firms adopting "profit-related-pay"(PRP) contratcs pay wages at levels that vary with the firm's profits. In the metal working industry last year, firms with PRP contracts in place showed productivity per worker on average 13 percent higher than that of their competitors who used more traditional contracts.

If, on the basis of the evidene above, it is argued that PRP contracts increase worker productivity, which of the following, if true, wud most seriously weaken the argument?

(A)Results similar to those cited for the metalworking industry have been found in other industries where PRP contracts are used.
(B)Under PRP contracts costs other than labor costs, such as plant, machinery,a nd energy, make up an increased proportion of the total cost of each unit of output.
(C)Because introducing PRP contracts greatly changes individual workers' relationships to the firm, negotiating the introduction of PRP contracts is complex and time consuming.
(D)Many firms in the metalworking industry have modernized production equipment in the last five years, and most of these introduced PRP contracts at the same time.
(E)In firms in the metalworking industry where PRP contracts are in place, the average take home pay is 15 % higher than it is in those firms where workers have more traditional contracts.
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Re: Firms adopting "profit-related-pay"(PRP) contratcs  [#permalink]

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New post 01 Sep 2018, 10:14
Discussed here:
https://gmatclub.com/forum/firms-adopti ... fl=similar
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Re: Firms adopting "profit-related-pay"(PRP) contratcs &nbs [#permalink] 01 Sep 2018, 10:14
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Firms adopting "profit-related-pay"(PRP) contratcs

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