'Henry Ford's $5 workday' Essay Example | Topics and Well Written Essays - 250 words

Henry Fords $5 workday - Essay ExampleWhen employees are contented, they would tend to empower in more than effort in their work, producing tone of voice in a sustainable manner. This also positioned the friendship strategically to outwit competition by change magnitude production at cheaper price owing to economies of scale.An employee who is paid well is more likely to put in more effort in the daily endeavors and tasks in spite of appearance the organization (Mankiw, Kneebone and McKenzie, Principles of Microeconomics). Compensation is directly proportional to the amount of effort an employee puts in their work.An employee who is paid well is more likely to have a balanced and healthy diet. This is because disposable income determines an employees expenditure limits. Therefore by paying workers better, the company reduces incidences of sick leaves, ensuring continual production.The better pay at Ford attracted high quality and even experienced employees. This availability o f labor motivates the contracted employees to work at their optimal level as they can be easily replaced (Mankiw and Scarth, Macroeconomics Canadian edition). This is known as adverse selection.In conclusion, by increasing employee compensation, Henry Ford strategically increased his production, output, sales and profits, while mitigating employee turnover. This concept is largely employed in the modern business world, where employees offer wages above the equilibrium