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8 November, 09:00

In 1914, Henry Ford increased the wage he paid workers in his car factory in Dearborn, Michigan to $5 per day. This wage was more than twice as much as other car manufacturers were paying. Ford was quoted as saying: "The payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made." Giving workers a raise can result in overall lower costs for a firm if

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  1. 8 November, 10:38
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    workers are motivated by higher wages to work harder.

    Explanation:

    When Henry Ford increased the wage of the worker in his car factory to $5 per day, which was more than twice as much as other car manufacturers were paying, he said that this increase in wage is the one of the best cost-cutting moves that they ever made.

    This increase in wage of five dollars a day for an eight-hour day is justified by the fact that when the worker are paid more they are motivated more to work and offer their best to the organisation. They word with more interest and work hard to achieve the goal. They feel more responsible and accountable to the organisation.

    Thus in this way this move is the best cost-cutting move.

    Thus the answer is workers are motivated by higher wages to work harder.
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