Copy center

Exercise

In a copy center servicing several departments within a university a new incentive system was introduced. Under the new compensation scheme every employee receives, apart from her fixed salary, a variable compensation of $0,25 for every copy above the standard of 2.000 copies. This standard was calculated using the historical average number of copies per day made by the employees. Analyze the new compensation system. Pay special attention to possible negative consequences resulting of its implementation.