skip to content
Analyzing compensation methods in manufacturing : piece rates, time rates, or gain-sharing? Preview this item
ClosePreview this item
Checking...

Analyzing compensation methods in manufacturing : piece rates, time rates, or gain-sharing?

Author: Susan Helper; Morris M Kleiner; Yingchun Wang; National Bureau of Economic Research.
Publisher: Cambridge, Mass. : National Bureau of Economic Research, ©2010.
Series: Working paper series (National Bureau of Economic Research), no. 16540.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
Economists have often argued that "pay for performance" is the optimal compensation scheme. However, use of the simplest form of pay for performance, the piece rate, has been in decline in manufacturing in recent decades. We show both theoretically and empirically that these changes are due to adoption of "modern manufacturing" in which firms produce a greater variety of products to a more demanding quality and  Read more...
Rating:

(not yet rated) 0 with reviews - Be the first.

Subjects
More like this

Find a copy online

Links to this item

Find a copy in the library

&AllPage.SpinnerRetrieving; Finding libraries that hold this item...

Details

Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Susan Helper; Morris M Kleiner; Yingchun Wang; National Bureau of Economic Research.
OCLC Number: 682584827
Description: 1 online resource (52 pages) : illustrations.
Series Title: Working paper series (National Bureau of Economic Research), no. 16540.
Responsibility: Susan Helper, Morris M. Kleiner, Yingchun Wang.

Abstract:

Economists have often argued that "pay for performance" is the optimal compensation scheme. However, use of the simplest form of pay for performance, the piece rate, has been in decline in manufacturing in recent decades. We show both theoretically and empirically that these changes are due to adoption of "modern manufacturing" in which firms produce a greater variety of products to a more demanding quality and delivery standard. We further develop a theory of the type of compensation system appropriate for this kind of production, in which there is a high return to "multi-tasking", where the same workers perform both easy-to-observe and hard-to-observe tasks and to "just-in-time" production, which entails a high cost of holding inventory. We test these predictions using detailed monthly information on firm outcomes and employee surveys from four plants in two companies that adopted modern manufacturing methods and changed their method of compensation from piece rates to either time rates or value-added gain-sharing. We find that time rates and gain-sharing are associated with reduced employee performance on easy-to-observe tasks, enhanced performance on hard-to-observe tasks, and improved firm profitability. Our analysis shows the importance of distinguishing types of incentive pay: we find that modern manufacturing is consistent with either group incentive pay (such as gain-sharing), or no incentives (such as hourly pay), but inconsistent with individual incentive pay (piece rates).

Reviews

User-contributed reviews
Retrieving GoodReads reviews...
Retrieving DOGObooks reviews...

Tags

Be the first.

Similar Items

Related Subjects:(2)

User lists with this item (1)

Confirm this request

You may have already requested this item. Please select Ok if you would like to proceed with this request anyway.

Linked Data


Primary Entity

<http://www.worldcat.org/oclc/682584827> # Analyzing compensation methods in manufacturing : piece rates, time rates, or gain-sharing?
    a schema:MediaObject, schema:Book, schema:CreativeWork ;
    library:oclcnum "682584827" ;
    library:placeOfPublication <http://id.loc.gov/vocabulary/countries/mau> ;
    library:placeOfPublication <http://experiment.worldcat.org/entity/work/data/912839004#Place/cambridge_mass> ; # Cambridge, Mass.
    schema:about <http://experiment.worldcat.org/entity/work/data/912839004#Topic/manufacturing_industries_personnel_management> ; # Manufacturing industries--Personnel management
    schema:about <http://dewey.info/class/330/> ;
    schema:about <http://experiment.worldcat.org/entity/work/data/912839004#Topic/incentives_in_industry> ; # Incentives in industry
    schema:about <http://id.worldcat.org/fast/968514> ; # Incentives in industry
    schema:bookFormat schema:EBook ;
    schema:contributor <http://viaf.org/viaf/284112169> ; # Yingchun Wang
    schema:contributor <http://viaf.org/viaf/135446122> ; # National Bureau of Economic Research.
    schema:contributor <http://viaf.org/viaf/94562355> ; # Morris M. Kleiner
    schema:copyrightYear "2010" ;
    schema:creator <http://viaf.org/viaf/18407879> ; # Susan Helper
    schema:datePublished "2010" ;
    schema:description "Economists have often argued that "pay for performance" is the optimal compensation scheme. However, use of the simplest form of pay for performance, the piece rate, has been in decline in manufacturing in recent decades. We show both theoretically and empirically that these changes are due to adoption of "modern manufacturing" in which firms produce a greater variety of products to a more demanding quality and delivery standard. We further develop a theory of the type of compensation system appropriate for this kind of production, in which there is a high return to "multi-tasking", where the same workers perform both easy-to-observe and hard-to-observe tasks and to "just-in-time" production, which entails a high cost of holding inventory. We test these predictions using detailed monthly information on firm outcomes and employee surveys from four plants in two companies that adopted modern manufacturing methods and changed their method of compensation from piece rates to either time rates or value-added gain-sharing. We find that time rates and gain-sharing are associated with reduced employee performance on easy-to-observe tasks, enhanced performance on hard-to-observe tasks, and improved firm profitability. Our analysis shows the importance of distinguishing types of incentive pay: we find that modern manufacturing is consistent with either group incentive pay (such as gain-sharing), or no incentives (such as hourly pay), but inconsistent with individual incentive pay (piece rates)."@en ;
    schema:exampleOfWork <http://worldcat.org/entity/work/id/912839004> ;
    schema:inLanguage "en" ;
    schema:isPartOf <http://experiment.worldcat.org/entity/work/data/912839004#Series/nber_working_paper_series> ; # NBER working paper series ;
    schema:isPartOf <http://experiment.worldcat.org/entity/work/data/912839004#Series/working_paper_series_national_bureau_of_economic_research> ; # Working paper series (National Bureau of Economic Research) ;
    schema:name "Analyzing compensation methods in manufacturing : piece rates, time rates, or gain-sharing?"@en ;
    schema:productID "682584827" ;
    schema:publication <http://www.worldcat.org/title/-/oclc/682584827#PublicationEvent/cambridge_mass_national_bureau_of_economic_research_2010> ;
    schema:publisher <http://experiment.worldcat.org/entity/work/data/912839004#Agent/national_bureau_of_economic_research> ; # National Bureau of Economic Research
    schema:url <http://ezproxy.eui.eu/login?url=http://www.nber.org/papers/> ;
    schema:url <http://papers.nber.org/papers/w16540> ;
    wdrs:describedby <http://www.worldcat.org/title/-/oclc/682584827> ;
    .


Related Entities

<http://experiment.worldcat.org/entity/work/data/912839004#Agent/national_bureau_of_economic_research> # National Bureau of Economic Research
    a bgn:Agent ;
    schema:name "National Bureau of Economic Research" ;
    .

<http://experiment.worldcat.org/entity/work/data/912839004#Place/cambridge_mass> # Cambridge, Mass.
    a schema:Place ;
    schema:name "Cambridge, Mass." ;
    .

<http://experiment.worldcat.org/entity/work/data/912839004#Series/nber_working_paper_series> # NBER working paper series ;
    a bgn:PublicationSeries ;
    schema:hasPart <http://www.worldcat.org/oclc/682584827> ; # Analyzing compensation methods in manufacturing : piece rates, time rates, or gain-sharing?
    schema:name "NBER working paper series ;" ;
    .

<http://experiment.worldcat.org/entity/work/data/912839004#Series/working_paper_series_national_bureau_of_economic_research> # Working paper series (National Bureau of Economic Research) ;
    a bgn:PublicationSeries ;
    schema:hasPart <http://www.worldcat.org/oclc/682584827> ; # Analyzing compensation methods in manufacturing : piece rates, time rates, or gain-sharing?
    schema:name "Working paper series (National Bureau of Economic Research) ;" ;
    .

<http://experiment.worldcat.org/entity/work/data/912839004#Topic/incentives_in_industry> # Incentives in industry
    a schema:Intangible ;
    schema:name "Incentives in industry"@en ;
    .

<http://experiment.worldcat.org/entity/work/data/912839004#Topic/manufacturing_industries_personnel_management> # Manufacturing industries--Personnel management
    a schema:Intangible ;
    schema:hasPart <http://id.loc.gov/authorities/subjects/sh97001369> ;
    schema:name "Manufacturing industries--Personnel management"@en ;
    .

<http://id.worldcat.org/fast/968514> # Incentives in industry
    a schema:Intangible ;
    schema:name "Incentives in industry"@en ;
    .

<http://viaf.org/viaf/135446122> # National Bureau of Economic Research.
    a schema:Organization ;
    schema:name "National Bureau of Economic Research." ;
    .

<http://viaf.org/viaf/18407879> # Susan Helper
    a schema:Person ;
    schema:familyName "Helper" ;
    schema:givenName "Susan" ;
    schema:name "Susan Helper" ;
    .

<http://viaf.org/viaf/284112169> # Yingchun Wang
    a schema:Person ;
    schema:familyName "Wang" ;
    schema:givenName "Yingchun" ;
    schema:name "Yingchun Wang" ;
    .

<http://viaf.org/viaf/94562355> # Morris M. Kleiner
    a schema:Person ;
    schema:familyName "Kleiner" ;
    schema:givenName "Morris M." ;
    schema:name "Morris M. Kleiner" ;
    .

<http://www.worldcat.org/title/-/oclc/682584827>
    a genont:InformationResource, genont:ContentTypeGenericResource ;
    schema:about <http://www.worldcat.org/oclc/682584827> ; # Analyzing compensation methods in manufacturing : piece rates, time rates, or gain-sharing?
    schema:dateModified "2018-05-17" ;
    void:inDataset <http://purl.oclc.org/dataset/WorldCat> ;
    .


Content-negotiable representations

Close Window

Please sign in to WorldCat 

Don't have an account? You can easily create a free account.