TY  - JOUR
AU  - Weiss,Andrew
TI  - Incentives and Worker Behavior:  Some Evidence
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2194
PY  - 1987
Y2  - March 1987
UR  - http://www.nber.org/papers/w2194
L1  - http://www.nber.org/papers/w2194.pdf
N1  - Author contact info:
Andrew Weiss
Weiss Asset Management
29 Commonwealth Avenue, 10th Floor
Boston, MA 02116
Tel: 617-778-7780
Fax: 617-778-7781
E-Mail: aweiss@weissasset.com
AB  - This paper is concerned with three types of incentive programs. First, individual wage incentives that cause a worker's efforts to have a major effect on his pay. Second, group incentives in which the pay of an individual is determined by the output of a group of workers-a group can be as small as a four member work team or as large as the whole firm. Finally, seniority based payment schemes in which the pay of a worker rises rapidly with his tenure with the firm. We show that these payment schemes have the effects in practice that we would predict from optimizing behavior by workers. We find that group incentives tend to compress the productivity distribution of workers. This is because the relative performance of the most productive workers tends to fall, and the most and least productive workers have relatively high quit rates when workers are paid on group incentives. We also present evidence that suggests that the low quit rates in large Japanese firms may be due to steep wage-tenure profiles in those firms.
ER  -