The two goals of linking pay to performance within firms are to mitigate adverse selection problems and to reduce moral hazard problems.
1) Does the standard hour plan (employee can get bonuses only if the actual units of output are greater than the standard units of output) help a company achieve these two goals?
2) Does the CIPP plan (Emplotees were rewarded for using an integrated, team-based approach) help John Deere achieve these two goals?