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Work Norms and Involuntary Unemployment

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  • Hajime Miyazaki

Abstract

Consider the organizational environment of labor management wherein the firm can measure the average performance (i.e., group work norm) of its employees but has difficulty in observing the individual worker's performance within the group. Accordingly, the worker's remuneration is based on the observed group norm. Because of the way in which workers interact among themselves in setting work norms, there results an undersupply of effort from a given workforce size. Furthermore, the group work norm is shown to be negatively correlated with the size of the workforce. Consequently, short-run unemployment can arise with involuntary features. The paper also explores the effectiveness of alternative remuneration schemes in mitigating the inefficiency associated with the group work norm setting.

Suggested Citation

  • Hajime Miyazaki, 1984. "Work Norms and Involuntary Unemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 99(2), pages 297-311.
    • Handle: RePEc:oup:qjecon:v:99:y:1984:i:2:p:297-311.
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    Cited by:

    1. Reynaud Benedicte, 1987. "Règles et l'incomplétude du contrat de travail dans le paradigme standard (les)," CEPREMAP Working Papers (Couverture Orange) 8742, CEPREMAP.
    2. Lin, Chung-cheng & Chang, Juin-jen & Lai, Ching-chong, 2002. "Profit sharing as a worker discipline device," Economic Modelling, Elsevier, vol. 19(5), pages 815-828, November.
    3. Chang, Juin-jen & Lai, Ching-chong & Lin, Chung-cheng, 2003. "Profit sharing, worker effort, and double-sided moral hazard in an efficiency wage model," Journal of Comparative Economics, Elsevier, vol. 31(1), pages 75-93, March.
    4. Chia‐Ying Liu & Chi‐Hsin Wu, 2009. "Environmental Consciousness, Reputation And Voluntary Environmental Investment," Australian Economic Papers, Wiley Blackwell, vol. 48(2), pages 124-137, June.
    5. O'Higgins, Niall, 2001. "Youth unemployment and employment policy: a global perspective," MPRA Paper 23698, University Library of Munich, Germany.
    6. Lee, Dong-Joo & Ahn, Jae-Hyeon, 2007. "Reward systems for intra-organizational knowledge sharing," European Journal of Operational Research, Elsevier, vol. 180(2), pages 938-956, July.
    7. Petersen, Trond, 1994. "Individual, Collective, and Systems Rationality in Work Groups: Dilemmas and Solutions," Institute for Research on Labor and Employment, Working Paper Series qt3wx234rd, Institute of Industrial Relations, UC Berkeley.

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