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Why Do Employers Provide Severance Pay to Employees? What Should

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Why do employers provide severance pay to employees? What should firms consider when designing a severance plan?


Definitions:

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus.

Rewards and Punishments

Incentives and consequences used to reinforce desired behavior and discourage unwanted behavior, respectively.

Gamification

The application of game-design elements and principles in non-game contexts to engage and motivate people to achieve their goals.

Mastery

A high level of skill or knowledge in a particular subject or activity.

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