What theory would suggest that an employee should receive a wage higher than the equilibrium wage rate?

Question

Quizplus · Accepted Answer

The efficiency wage theory suggests that paying employees above the equilibrium wage rate can increase productivity, reduce turnover, and attract higher-quality workers. The higher wage serves as an incentive for employees to work harder and stay with the company longer, ultimately benefiting the employer in the long run.

What Theory Would Suggest That an Employee Should Receive a Wage