Question

The subject is Human Resource Economics.

Explain “Efficiency Wages”.

Why are they useful to employers?

How can they go wrong?

Answer 1

1 en 2- ANSWER Efficiency wages- The term efficiency wages" was introduced by Alfred Marshall to denore the wage per efficiency unit of labour Efficiency wage is the wage above equilibrium for the weage above than what preenailius the market) that voluntarily pay to increase productivity of labour and increase profit. Usefulness of efficiency wages to employers I'mpscoved production in Organisation Paying a highey, wage can improve the production of organisation as the employce feel motivated and encouraged ley getting highey wages Increased retention Efficiency wages help in reducing employee tyvinovey thereby bringing stability in the organisation. Help in attracting Skilled workers - morate and productivity. Negative effects of Efficiency Wages It leads to higher unemployment Efficiency wages produces higher who are employed but higher levels of unemployment- It often leads to discrimination and einequality among the employees which lowers the morale of the employees who get low wages. Increases the labour cost - Efficiency would fail to & supply and give rise to oven - edicalion, descrimination, regional wage differences and a tendency foy larger firms pay higher sages. to Fase No.