Question

How can the company afford to pay it workers for productivity gains?

Answer 1

A company may pay off its workers for productivity gains by using its savings from costs related in the production of product, such as savings in cost of carrying inventory. Productivity allows a company to save from some costs because of the efficiency of converting inputs into outputs for the company.

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Answer 2

A company can afford to pay its workers for productivity gains by making use of the savings from the budget and the costs proposed for the manufacturing of the product. These are the savings in cost that is left after utilizing the money for the inventory and other resources.  

Explanation:

• The enterprise is able to save the money because of their efficiency of converting inputs into outputs in a cost-effective manner.

• There are various ways to increase productivity gains by bringing efficiency in the process of manufacturing and minimizing wastage levels.  

• The gains from efficiency are a source of larger profits for companies and it results in the business making profits and then they are able to pay higher wages to their workforce.  

• The higher wages help with increasing the levels of consumption, purchasing power and better standards of living for the people.  

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