According to efficiency wage theory, what is a way to increase employees' work effort?
A) increase wages
B) increase the number of supervisors
C) decrease wages
D) reduce the number of supervisors

Question

Quizplus · Accepted Answer

Efficiency wage theory suggests that paying higher wages than the market equilibrium can increase employees' work effort and therefore productivity. This is because higher wages act as an incentive for employees to work harder in order to maintain their higher paying job. Increasing the number of supervisors or reducing wages is not necessarily linked to increasing work effort.

According to Efficiency Wage Theory, What Is a Way to Increase