Final answer:
Employers conduct salary surveys to determine competitive wages that align with market trends and to maintain a productive and stable workforce. This practice helps in retaining talent and minimizing hiring costs, while operating under an implicit contract that balances out economic fluctuations. Option C is correct.
Step-by-step explanation:
The main purpose why employers conduct salary surveys is to set competitive wages. This practice helps businesses ensure that their pay rates are aligned with market trends and are attractive enough to retain and attract talent. In times of unemployment and job scarcity, workers may be inclined to accept lower wages, allowing businesses to maintain or increase profits without raising wages. Conversely, the efficiency wage theory highlights that paying employees somewhat more than market rates can lead to increased worker productivity, as employees recognize the value of their positions and are motivated to work harder and stay with the company. This also reduces the employer's costs associated with hiring and training new workers.
Moreover, employers often operate under an implicit contract with employees, aiming to maintain stable wages during economic downturns or business troubles, while employees do not expect significant wage increases during booming economic periods. This approach functions as a form of insurance for employees against wage declines in hard times, while employers benefit from the loyalty and consistent performance of their staff.