Inflation and Stagnation in an Economy

At the heart of stagflation stands out as the contemporary practice of tying employee compensation to factors that are outside the firm's control (such as cost of living). The firm's unique performance (and thus the employees' performances) aren't reflected inside the modern-day compensation matrices in location at most American companies. Instead, tying an employee's salary on the performance of the business will trigger increased productivity, increased profits, and elevated gross national product. Having presented his core item within the first three pages of his text, Weitzman devotes the remainder of the book to justifying the item and offering examples and illustrations of how his new compensation package could be implemented. Expecting resistance, he begins by examining corporate America itself as well as the major decisions that all businesses face. All firms need to decide how significantly to make, how significantly labor to use to create it, and the cost to charge.

Weitzman incorporates economies of scale into his argument (11) to suggest that mass production is characterized by declining average costs more than the lengthy run. By suggesting a lower overall wage, but such as employees in profit sharing strategies, there would be lower prices, more output and greater employment (21). What Weitzman is proposing (and the source for your title of his book) is a share technique of compensation instead of a wage-based system. What Weitzman's concepts result in is often a complete and thorough revamping with the American economy and workplace. Over a a single hand, workers would be encouraged to be far more productive and this sort of increases in productivity would be identified by increased compensation. Presumably, the salaries of chief executives, which have received much recent attention, would eventually arrive closer into alignment with their Japanese counterparts (which are much lower) as elevated pressure for profitability carries up within the rank and file workers.

Workers would be additional most likely to encourage productivity and innovation that would improve profitability, and workers would use peer pressure, rather than relying on management discipline, to bring nonproductive workers into line. Since a share economy would mean the demise of the big unions, such a compensation structure is likely to encounter strong opposition from contemporary union leaders. Simply because the compensation process would most likely lead to reduced person compensation for managers, there is possibly to become resistance from that group, as well. Like a result, bringing about a share economy is most likely to become difficult, despite Weitzman's well idea out and well presented arguments. There are other ramifications, as well. The require for unions, for example, would disappear, at least in their modern configuration.

Rather than owning unions according to occupation, unions representing all workers in a single company are probably to develop because all workers have a stake in the way the compensation process is structured. This sort of unions would be more almost certainly to work in concert with management simply because the overall goal in the company -- higher profits -- would be the overall goal with the workers, as well.

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