The idea of paying workers an efficiency wage is that
A) doing so is more efficient than paying them the market wage.
B) paying workers less gives them the incentive to work harder.
C) workers and management gain at the expense of the stockholders of the company.
D) workers have the incentive to work harder, thus increasing their marginal productivity.

Question

Quizplus · Accepted Answer

Paying workers an efficiency wage provides them with the incentive to work harder and increase their marginal productivity, ultimately benefiting the company. This goes against the traditional belief that paying workers less leads to greater productivity, as the efficiency wage theory suggests that better pay can result in improved performance and loyalty from employees. Therefore, the answer is D.

The Idea of Paying Workers an Efficiency Wage Is That