Efficiency wage models are often criticized because:
A)other pay-for-performance plans could serve as a substitute for an efficiency wage
B)employees could be required to post a forfeitable bond instead
C)shirking could be reduced by deferred compensation plans
D)all of the above

Question

Quizplus · Accepted Answer

All of the above are criticisms of efficiency wage models. Some economists argue that pay-for-performance plans, which tie employee compensation to individual productivity, may be a better alternative to efficiency wages. Others suggest that employees could be required to post a forfeitable bond, which would be returned if they meet certain performance requirements. Deferred compensation plans, which delay a portion of an employee's pay until a future date, may also reduce shirking.

Efficiency Wage Models Are Often Criticized Because