What Is Moral Hazard and How Might It Manifest in an Employment

question 64

Essay

What is moral hazard and how might it manifest in an employment relationship? What can an employer do to reduce the problem of moral hazard?

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Definitions:

Conflict of Interest

A situation in which an individual's or entity's personal interests could potentially interfere with their ability to make unbiased decisions in their professional role.

Disclose

To make known or reveal information that was previously unknown or kept secret.

Avoid

To keep away from or refrain from something, typically because it is not desired, harmful, or risky.

Honesty

The quality of being truthful, transparent, and free from deceit or fraud.