Question

Hasina is a plant manager at a factory in a relatively poor country. Even though market wages are low, she decides to raise the wages of her workers so they can have a more nutritious diet. According to efficiency wage theory the increase in wages will:_______-

Answer 1

According to efficiency wage theory the increase in wages will raise productivity but increase unemployment.

Explanation:

Salaries for productivity are greater than salaries of harmony. They increase productivity, but also create a labour surplus that creates greater unemployment.

The Efficiency Pay Theory states that businesses can operate efficiently and make them more competitive by paying salaries that surpass the margin.

Across four ways, businesses will benefit from productivity wages : increased workloads, reduced employee turnover, better quality workers, and healthier personnel. There are three different theories.

The idea behind the principle of effectiveness is that higher salaries can lead to increased efficiency, as employees are more motivated to work for greater salaries. In principle, higher pay can lead to higher labour productivity. The salary increases will cover themselves in this situation.