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Powerful incentives can cause undesired behaviors. Suggest waysto solve this problem, using something you know a great deal about– academic performance. With incentives come the challenges ofethical, moral, and legal behavior having a diminished impact onthe choices one makes to achieve the incentive. This effect wasshown with outstanding in the banking sector during the 2008economic meltdown. The large incentives offered to the peopleworking in the financial sector drove large groups to conductunethical and what became illegal operations that led to thecollapse of the US housing market and had ripple effects throughoutthe world’s economies. In the scholastic arena, having training toeducate students on what unethical and illegal behavior is a firststep. Then by giving students the tools needed to verify that theirwork is not breaching these two things before turning their workin. And finally, by giving instructors and institutions the toolsto check and verify a student’s work ins their own. This systemworks by e3ducating then having checks and balances in place toverify. How would you design a pay-performance system that usespowerful incentives to motivate behavior, yet keep the behaviorfrom veering into the unethical? (Hint: You want to keep thepowerful incentive effect of pay. So, don’t recommend eliminatingincentive pay or reducing the size of the incentive component.)What’s left? The first step is offering an equal ability to allemployees to obtain the incentive. This will involve training,mentoring, and the opportunity to have access to the incentives.Next the incentives must be set in a way that ensures the methodsof reaching the incentives encourages employees to behave in amanner that is congruent to the company’s mission and culture.Lastly the methods employees use to reach the incentives must beable to be verified with a checks and balances by someone that theincentives will not effect. How do you ensure ethical behavior?This starts with the company and its core mission statement, thenthis has to be followed up with training on the standards, laws andexpectations. Lastly the company must use checks and balances toverify the methods being used are following the ethical standardsput in place. These checks must be conducted by someone who is notgoing to benefit from the manipulation of ethical judgment.