Final answer:
The additional pay offered to a prospective employee to encourage them to accept a job is called a sign-on bonus (option a). Sign-on bonuses are part of a strategy aligned with the efficiency wage theory, which posits that higher than average pay leads to more productive employees and reduces turnover costs.
Step-by-step explanation:
Additional pay given to entice a prospective employment candidate to work for an employer is known as a sign-on bonus. This is a strategy employed by companies to attract high-quality candidates and can be connected to concepts such as the efficiency wage theory, which suggests that employees are more productive when they are paid more than the market average. The reason behind offering a sign-on bonus is two-fold: it not just makes a job offer more attractive, but also encourages employees to be more engaged and committed to the company. By paying workers a premium, whether it's through a sign-on bonus or higher wages, businesses aim to minimize the costs associated with training new personnel and leverage the benefits of a motivated workforce. In addition to a sign-on bonus, other forms of supplemental pay include overtime pay, base rate pay, and annual salary.
In competitive job markets, especially where specific skills or talents are in short supply, sign-on bonuses can play a significant role in recruitment strategies. Compensation beyond base salaries, like health benefits and retirement savings plans (both defined benefit and defined contribution), also contribute to the overall package offered to employees. These additional benefits can make a position more desirable and help to retain staff in the long term. The integration of supplemental pay with fair base wages, shaped by market competition and union negotiations, forms a comprehensive compensation strategy that can enhance productivity and profitability in a business.