Final answer:
Organizations that compete for applicants on the basis of pay often use higher wages or salary to attract applicants. This is because wages tend to be set based on the supply and demand for specific skills or qualifications.
Step-by-step explanation:
Organizations that compete for applicants on the basis of pay often use higher wages or salary to attract applicants. This is because wages tend to be set based on the supply and demand for specific skills or qualifications. When there is a shortage of people with certain talents or skills, businesses are more likely to offer higher pay to attract those individuals.Additionally, the efficiency wage theory suggests that paying employees more than market conditions dictate can lead to increased productivity and employee retention. Employees who receive better pay than their peers are motivated to work harder and stay with their current employer to avoid a decline in salary if they were to leave. Employers also benefit from paying slightly higher wages, as it reduces the costs associated with hiring and training new workers.