Explanation:

A private company has several options in the job market, such as hiring, outsourcing, or dismissing employees. The management flexibility of dismissing employees, even without just cause, provides an economic benefit for companies. By addressing real options, this study aims to measure the effects of this flexibility on the employer's decision to hire more employees as well as to invest in the more productive employees through graduate incentives.

This article evaluates the adverse impacts of labor laws that restrict this flexibility, such as the Severance Indemnity Fund (FGTS) fine and the prior notice of termination of employment, in order to find out how much the employee adds value to the company and, consequently, to its salary. Using this methodology, this study also evaluates, from the employer's perspective, the relevance and value maximization of the company's financial support programs for employees taking graduate courses.