Final answer:
It is true that employees' wages are likely to be higher if they are more productive, as businesses compensate workers based on the value of their output and find it beneficial to pay more for higher productivity to motivate workers and reduce turnover.
Step-by-step explanation:
True, if employees are more productive, their wages will likely be higher as their productivity is linked to their value to the employer. Efficiency wage theory and practical economic analysis support the idea that productivity and wages are interconnected. In essence, a worker's productivity—the amount of output produced per hour—serves as a critical determinant of wage levels in an economy.
Employers are inclined to pay workers at a level that reflects their productivity due to competition for skilled labor and the desire to maintain a motivated workforce. If employees produce valuable output for a company and are being underpaid, they may find higher wage offers elsewhere, compelling their current employers to match these wages to retain them. Conversely, if employers overpay workers relative to their productivity, the business may suffer losses.