Daisy is the newly appointed CEO of a company that manufactures CD drives on an assembly line.Her staff has told her that the output the firm produces,given the number of workers employed,indicates that some workers may be shirking.According to efficiency wage theory,what should she do?

Question

Quizplus · Accepted Answer

The efficiency wage theory suggests that paying workers above the equilibrium wage rate can motivate them to work harder and reduce shirking. By doing so, workers will perceive the higher wage as a reward for putting in more effort, and they will work harder to keep their jobs. This can increase productivity and ultimately benefit the company by generating more output. Therefore, Daisy should pay all workers more than the equilibrium wage rate.

Daisy Is the Newly Appointed CEO of a Company That