What is the efficiency wage?

efficiency wage is a wage that is extended to employees as a means of motivating this employee to stay in society rather than looking for opportunities with competitors or even in another industry completely. Along with an increase in the chance to maintain a valuable employee, the extension of this type of wage can also serve as an incentive to increase the general productivity of the employee. This is because the employee feels appreciated by the employer and is willing to make further efforts in response to this perception.

One of the characteristics of efficiency wages is that the number is not only based on the current standards set in this industry. Instead, the wage serves as a means of meeting and exceeding this current standard. Increased wages help attract more qualified employees and also provide them with a reason for the company to stay for a long time. This is unlike the idea of ​​setting wages on the basis of supplemental employees in this area and the demand for employees who predominateat a local level.

Although there are many different theories about the benefits of using wage efficiency strategy, there are four key benefits that employers try to gain with this model. The first has to do with increasing productivity. Here is the idea that employees who are well compensated and feel important to society will make more effort to fulfill their work duties. On the other hand, employees who feel underestimated are likely to make the minimum effort needed to maintain their positions and no longer. Over time, this thinking has a negative impact on the company's profitability, perhaps to the extent that the company failed.

Another advantage of efficiency wages has to do with the prevention of high amounts of turnover in the workplace. EXPEND ČAS and sources of training new employees whenever the position is unoccupied and must be filled in. By providing incentives standThe employees of the employees to stay are kept to a minimum. This, in the long run, is beneficial to all associated with society.

Use of efficiency wages allows you to attract a wider range of qualified candidates for open position. With more possibilities, as far as position is concerned, the employer is more likely to find someone who is apparently more qualified than others than to have to settle for someone who meets the criteria but offers only a little more. This not only provides immediate benefits to employers, but can also prepare the ground for growing abilities and talents that have ultimately have the company over the years.

There is even a nutritional benefit that is sometimes associated with prolonging efficiency. Here, the problem concerns the employee's ability to afford higher food quality and live a lifestyle that is healthier. Assuming the employee keeps good health is less likely to miss DN due to illnessy work. This means that productivity is maintained without the need to ask other employees to cover the basic tasks while one employee is sick.

Every company must look at its own set of circumstances and determine whether the use of wage efficiency would provide beneficial. Once this approach has been found to be advantageous, determining how and when a strategy needs to be performed, it should be carefully considered carefully. This often involves examining the potential of each employee considered and deciding whether this additional investment in the employee/employer's relationship would bring the required benefits.