Final answer:
Employers know that happy employees are more productive, as they tend to be more engaged and committed. Investing in maintaining a happy workforce can result in higher productivity and reduced hiring and training costs.
Step-by-step explanation:
Based on the context provided and the efficiency wage theory, employers know that happy employees are productive. Happy employees tend to be more engaged and committed to their work, leading to higher quality outcomes, better customer service, and lower turnover rates. By providing competitive compensation and a positive work environment, employers can ensure a motivated workforce ready, willing, and able to work, which is a beneficial strategy for long-term success. Employees who feel valued are less likely to actively look for work elsewhere and often deliver more value than what they're paid due to increased productivity. Additionally, investing in employees by paying them more than the market rate can help employers avoid costs associated with hiring and training new workers, especially as employees who are paid better than others are more likely to be tireless and commit to their current employer rather than facing a decline in salary elsewhere.