Which of the following theories describes the conditions when the benefits of higher pay outweigh higher costs?
A)Equity theory
B)Expectancy theory
C)Reinforcement theory
D)Efficiency wage theory
E)Social exchange theory

Question

Quizplus · Accepted Answer

Efficiency wage theory argues that higher pay can actually result in cost savings for employers because it can increase worker productivity, reduce turnover rates, and attract more qualified applicants. This theory suggests that there is a point at which the benefits of paying higher wages (such as increased productivity and reduced turnover) outweigh the costs of paying those wages (such as higher labor costs).

Which of the Following Theories Describes the Conditions When the Benefits