Final answer:
This question deals with designing a compensation plan that includes various benefits to compensate for lower wages and considers renegotiation. .
Step-by-step explanation:
The question revolves around the design of a compensation plan and its sufficiency in offsetting lower wage offers. It is important for a company like 2G Robotics to consider not just the base salary but the entire total compensation package, which can include benefits, stock options, bonuses, and other perks that might be appealing to employees. Regular assessment of this compensation package is essential, with potential for renegotiation within 6 to 12 months based on performance or market standards.
The Gizmo Company's case brings forward the concept of social benefits alongside financial returns. An investment yielding a certain percentage return for the company will also yield a higher return for society, highlighting an additional social value of the investment. Gizmo Company needs to consider these social benefits when making decisions regarding where to allocate their financial capital for research and development.
Nonetheless, a balance between labor and capital investment is crucial. As wages increase, companies like the one mentioned in the final example might be inclined to invest more in machinery to increase productivity, potentially leading to a reduction in the number of workers needed. This showcases the dynamic nature of compensation and investment decisions within a business environment.