Question

12. Explain why employees typically prefer being paid on a time basis. 13. What factors create the link between wages and productivity that is at the heart of efficiency wage model? 14. Wages tend to rise as tenure with one's employer increases. There are three sets of theoretical explanations for this increase in wages. What are these three tl DAHAN explanations?

Answer 1

12. When employees are paid on the basis of time, productivity is not an important factor. Therefore, no matter how inefficient a worker is, he.she is paid a fixed wage for a particular time duration. On the contrary, in a performance-based pay mode, a worker needs to reach a particular level of efficiency and productivity in order to earn a particular level of wage.