Efficiency wage theory argues that workers’ productivity depends on their pay, a

Efficiency wage theory argues that workers’ productivity depends on their pay, a

Efficiency wage theory argues that workers’ productivity depends on their pay, and so employers will often find it worthwhile to pay their employees somewhat more than market conditions might dictate. Do you think this theory generally holds true, with better pay motivating higher productivity? Or do workers feel complacent and higher wages don’t pay off for the firm in terms of higher productivity?

Yes, I do think that if payed more it motivates and help increases employees productivity. Better wages to an employee can result in longer employment and great working environment. Employees will focus better at there job and tasks assigned by employer.  Also helps sustain their personal life and drives many of their choices outside of work. It is also one of the key details people consider when choosing where to work. I strongly believe that employees drives your business forward, so if their income impacts their stability in some way, that’s going to impact their productivity. That means their salary is directly linked to your company’s success.

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