IST, Integrated Systems Testing, and PRSR, Pre-Revenue Service Running, have been undergone by TMC, Taoyuan Metro Corporation, in Taiwan for an endlessly long time, and one thing this company taught me is “Efficiency Wage”, a response to asymmetric information about employees, combating both ex-ante Adverse Selection and ex-post Moral Hazard. If, on the one hand, a firm reduces its wage, the better employees may take jobs elsewhere, leaving the firm with inferior staffs who have fewer alternative opportunities. One the other hand, firms cannot perfectly monitor their employees’ work effort, and staffs must themselves decide how hard, how right and how smart to work. An iffiest future! The worst lesson!
Related post: http://264marketer.blogspot.tw/2015/10/degraded-mode-operation.html