Unlike in the previous question, sometimes piece rates don’t work so well. Why might the following incentive mechanisms turn out to be more trouble than they’re worth?
a. An industrial materials company pays welders by the number of welds per hour. Of course, the company pays only for necessary welds.
b. A magazine publisher pays its authors to write “serial novels” one chapter at a time. The authors are paid by the word (common in the nineteenth century and how Dickens and Dostoyevsky made their livings).