Question

Which of the following is not a potential reason for offering a wage above the market wage?

a) Attracting High-Quality Employees
b) Retaining Skilled Workers
c) Reducing Labor Costs
d) Increasing Employee Satisfaction

Answer 1

Option c) Reducing Labor Costs is not a reason for offering a wage above the market wage; higher wages are rather associated with attracting and retaining talent and increasing employee satisfaction while potentially increasing overall productivity.

Step-by-step explanation:

The question asks which of the given options is not a potential reason for offering a wage above the market wage. The answer is c) Reducing Labor Costs. Offering a wage above the market wage can attract high-quality employees, retain skilled workers, and increase employee satisfaction, but it does not reduce labor costs. In fact, paying above the market wage is typically a strategy used under efficiency wage theory, which suggests that higher pay can lead to increased worker productivity and can help in avoiding costs associated with turnover, such as hiring and training new employees. However, this strategy results in higher immediate payroll expenses, not reductions in labor costs.