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Efficiency Wage Theory Essay

867 Words4 Pages

Hello, my name is Stevie. I want to be a businessman that manage the wage of the workers, so I chose this topic about the wage. A measure of wages decides the productivity of workers. Do you agree this statement? It is called ‘efficiency wage theory’. The purpose of this presentation is to make you have better understanding of the efficiency wage theory. First, I will talk about the development of the theory and analyse the 3 factors that have contributed in its development. Second, I will explain the influence of the efficiency wages in economics, business and society. Third, the critics’ assertion will be also discussed. If you want to be a manager or employer, this theory could help you to manage your workers. If you have a question, please …show more content…

The term "efficiency-wages" was invented by Alfred Marshall, who was an economist in England. Marshallian efficiency wages make employers to pay different wages for workers who are of different productivity. However, the modern use of the term is quite different and refers to the idea that higher wages increase the productivity of the workers, which has been called efficiency wage theory. There are three factors that have contributed in the development of efficiency wage theory. First, various studies have shown that workers who have sufficient nutrition are more productive than workers who are not. For example, among the TA students, the student that intake high caloric such as Ron will be more productive than others. In other words, a more health worker will perform better for the firm. Efficiency wage theory asserts that the high wages can be the nutrition by increasing the quality of workers’ …show more content…

Firstly, efficiency wage theory impacts to the economics. In economics, human capital and its productivity are very important factor for the labour market. According to the efficiency wage theory, high wage increases the productivity of the workers, and finally the high productivity would help to increase the economic growth as well as increasing employment. Secondly, efficiency wage theory also have big influence in business because to decide the workers’ wages is important in management. The wise decision about the measure of wages will decide the benefits of the firm. Thirdly, in society, there is no person who hate money. I love money. (웃으면서) Do you love money? Fix. You have to love money. If all of firms increase the wages, people’s satisfaction and quality of life will also increase, and finally give the positive influence in society as well as it can lead high

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