Incentive systems are ideally given based on the performance of the employees, where performance is a function of effort. Problems become complex when the efforts of employees are not easy to observe.

The Questions are: 1. An expert stated that basically whether the company is engaged in the production of goods or the production of services, the performance measures for employees are basically the same. Explain with some references according to Industry and Competitive Analysis. 2. The expert also stated that performance measures for workers in all divisional lines, whether it be administrative, financial, operational, etc., are basically the same, as long as they are in the same company. Explain with some references according to Industry and Competitive Analysis.