Efficiency wages can be used to:
A)prevent self-selection of employees.
B)retain firm-specific human capital.
C)compare the relative performance of employees.
D)reduce influencing activities.

Question

Quizplus · Accepted Answer

Efficiency wages are wages that are higher than the market clearing wage to increase productivity and retain talented employees. By offering higher wages, firms can retain their firm-specific human capital, which are the skills, knowledge, and experience that are unique to a particular firm. This can give the firm a competitive advantage over its rivals. Preventing self-selection of employees, comparing relative performance, and reducing influencing activities are not directly related to efficiency wages.

Efficiency Wages Can Be Used To