Question

Analyze the extent to which you tend to concur with the following statements regarding the role of wage (W) rates:

B) additional work effort (marginal productivity) can be better motivated for salaried than for hourly-paid employees by job ladders and opportunities for promotion.

Answer 1

The statement is true. Additional work effort for salaried will be more than hourly paid employees by giving them job ladders and opportunities for promotion as in case of hourly wage earners the utility for wages with additions hours keeps decreasing. Also there is no future associated so no motivation for future and no hope for better position or opportunity. Whereas for salaried people marginal productivity can be motivated even without paying additional wages as giving them the job ladder or prospect of promotion works as motivation due to long term benefits which is not the case with wage earners.