Higher Wages Aren’t Enough to Turn Mediocre Jobs into Good Ones

(From The Harvard Business Review)

Drawing on the concept of “efficiency wages,” some economists argue that higher pay can by itself improve performance by enabling companies to attract and retain better people and by motivating employees to work harder… As one of us has witnessed first-hand while working at a large retailer, even highly skilled and motivated workers will not be able to be as productive as expected because the company’s operational systems got in their way, wasting rather than maximizing their skills and enthusiasm.

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