Moral Hazard in the Workplace and The Incentives that Gave Rise to Moral Hazard

Moral Hazards
Student
Institution
Course
Professor
Date
Moral Hazards
Moral hazards entail activities or decisions that risk one's reputation or that of the organization. In many instances, the moral hazard is perpetrated by individuals who do not act in good faith and can produce negative economic consequences on the organization or the person. There are many moral hazards, especially when two or more parties agree. In our workplace, there have been numerous cases of moral hazards that have taken place. The compensation process when engaging with salespersons is also prone to produce moral hazards. When salespeople are compensated on fixed salaries instead of their performance, there are chances that they will not have consistent efforts or invest more time in doing their work (Depersio, 2021).
One case of a moral hazard was when the sales manager placed the salespeople on monthly salaries instead of compensating them based on performa...