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Interdependence in worker productivity

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Author Info

  • Joshua Herries

    (Sears, Roebuck and Co, 3333 Beverly Rd, E5-306B, Hoffman Estates, IL 60179, USA)

  • Daniel I. Rees

    (University of Colorado at Denver, Department of Economics, Campus Box 181, Denver, CO 80217, USA)

  • Jeffrey S. Zax

    (University of Colorado at Boulder, Boulder, CO, USA)

Abstract

This paper investigates interactions between co-worker productivity levels in a rich empirical context. Workers have unambiguous output measures, compensation that depends on individual and group output to differing degrees and potential peers beyond their immediate work group. Important productivity interdependencies exist, which could arise from the group-based component of compensation, peer pressure, common supervisors or information exchanges, but not group-based output or technological interdependence. Workers with the strongest individual incentives seem least sensitive to these interactions. In contrast, they are important to workers with no individual incentives. For these workers, peer pressure must be a powerful influence. Copyright © 2003 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/jae.738
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File URL: http://qed.econ.queensu.ca:80/jae/2003-v18.5/
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 18 (2003)
Issue (Month): 5 ()
Pages: 585-604

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Handle: RePEc:jae:japmet:v:18:y:2003:i:5:p:585-604

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References

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  1. B. Ruth Montgomery, 1989. "The influence of attitudes and normative pressures on voting decisions in a union certification election," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 42(2), pages 262-279, January.
  2. Carmichael, H Lorne & MacLeod, W Bentley, 2000. "Worker Cooperation and the Ratchet Effect," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 1-19, January.
  3. Kandel, E. & Lazear, E.P., 1990. "Peer Pressure and Partnerships," Papers 90-07, Rochester, Business - Managerial Economics Research Center.
  4. Lazear, Edward P, 1986. "Salaries and Piece Rates," The Journal of Business, University of Chicago Press, vol. 59(3), pages 405-31, July.
  5. Daniel G. Hansen, 1997. "Work performance and group incentives: A case study," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(1), pages 37-49, October.
  6. Barron, John M & Gjerde, Kathy Paulson, 1997. "Peer Pressure in an Agency Relationship," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 234-54, April.
  7. Dong, Xiao-yuan & Dow, Gregory K, 1993. "Monitoring Costs in Chinese Agricutural Teams," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 539-53, June.
  8. Fehr, Ernst, et al, 1998. "When Social Norms Overpower Competition: Gift Exchange in Experimental Labor Markets," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 324-51, April.
  9. Chillemi, Ottorino & Gui, Benedetto, 1997. "Team Human Capital and Worker Mobility," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 567-85, October.
  10. Charles Brown, 1990. "Firms' Choice of Method of Pay," NBER Working Papers 3065, National Bureau of Economic Research, Inc.
  11. William A. Brock & Steven N. Durlauf, 2000. "Interactions-Based Models," Working Papers 00-05-028, Santa Fe Institute.
  12. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
  13. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-31, July.
  14. Andrew Weiss, 1987. "Incentives and Worker Behavior: Some Evidence," NBER Working Papers 2194, National Bureau of Economic Research, Inc.
  15. Drago, Robert & Garvey, Gerald T, 1998. "Incentives for Helping on the Job: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 1-25, January.
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  18. Holmstrom, Bengt & Milgrom, Paul, 1994. "The Firm as an Incentive System," American Economic Review, American Economic Association, vol. 84(4), pages 972-91, September.
  19. Hollander, Heinz, 1990. "A Social Exchange Approach to Voluntary Cooperation," American Economic Review, American Economic Association, vol. 80(5), pages 1157-67, December.
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Citations

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Cited by:
  1. Lee, Lung-fei, 2007. "Identification and estimation of econometric models with group interactions, contextual factors and fixed effects," Journal of Econometrics, Elsevier, vol. 140(2), pages 333-374, October.
  2. Fabio Sabatini, 2005. "Does Social Capital Improve Labour Productivity in Small and Medium Enterprises?," Others 0508005, EconWPA.
  3. D'Haultfoeuille, Xavier & Davezies, Laurent & Fougère, Denis, 2006. "Identification of Peer Effects Using Group Size Variation," CEPR Discussion Papers 5865, C.E.P.R. Discussion Papers.
  4. Barmby, Tim & Sessions, John G. & Zangelidis, Alexandros, 2013. "Looking After Number Two? Competition, Cooperation and Workplace Interaction," IZA Discussion Papers 7803, Institute for the Study of Labor (IZA).
  5. Dan Ofori & Jocelyn Sackey, 2010. "Assessing Social Capital for Organisational Performance: Initial Exploratory Insights From Ghana," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 1(2).
  6. Fabio Sabatini, 2005. "Does Social Capital Improve Labour Productivity in Small and Medium Enterprises?," Others 0509011, EconWPA.
  7. Fabio Sabatini, 2006. "Does Social Capital Improve Labour Productivity in Small and Medium Enterprises," Working Papers 92, University of Rome La Sapienza, Department of Public Economics.
  8. Aakvik, Arild & Hansen, Frank & Torsvik, Gaute, 2013. "Dynamic Peer Effects in Sales Teams," Working Papers in Economics 10/13, University of Bergen, Department of Economics.
  9. Michelle Brown & John Heywood, 2009. "Helpless in Finance: The Cost of Helping Effort Among Bank Employees," Journal of Labor Research, Springer, vol. 30(2), pages 176-195, June.

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