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The Incentive Effects of Dismissals, Efficiency Wages, Piece-Rates and Profit-Sharing

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  • Kraft, Kornelius

Abstract

The relation of several incentive schemes to productivity is studied, with a particular emphasis on the effects and determinants of dismissals. Dismissals turn out to be positively, but in a nonlinear way, associated with productivity. Similarly, profit-sharing raises productivity. Wages and piece-rates are insignificant. Profit-sharing decreases the number of dismissals made by firms. Copyright 1991 by MIT Press.

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  • Kraft, Kornelius, 1991. "The Incentive Effects of Dismissals, Efficiency Wages, Piece-Rates and Profit-Sharing," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 451-459, August.
    • Handle: RePEc:tpr:restat:v:73:y:1991:i:3:p:451-59
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    Cited by:

    1. Thorolfur Matthiasson, 1997. "Fixed wage or share: Contingent contract renewal and skipper motivation," Labor and Demography 9702002, University Library of Munich, Germany.
    2. repec:zbw:bofrdp:2017_033 is not listed on IDEAS
    3. Jones, Derek C. & Kalmi, Panu & Kato, Takao & Mäkinen, Mikko, 2017. "Worker separation under performance pay : Empirical evidence from Finland," Research Discussion Papers 33/2017, Bank of Finland.
    4. Uwe Jirjahn, 2016. "Which employers regard the threat of dismissal as a suitable incentive to motivate workers?," Applied Economics Letters, Taylor & Francis Journals, vol. 23(9), pages 614-617, June.
    5. Jirjahn, Uwe & Mohrenweiser, Jens, 2023. "Variable Payment Schemes and Productivity: Do Individual-Based Schemes Really Have a Stronger Influence than Collective Ones?," IZA Discussion Papers 16267, Institute of Labor Economics (IZA).
    6. Douglas L. Kruse, 1993. "Does Profit Sharing Affect Productivity?," NBER Working Papers 4542, National Bureau of Economic Research, Inc.
    7. Doucouliagos, Chris & Laroche, Patrice & Kruse, Douglas L. & Stanley, T. D., 2018. "Where Does Profit Sharing Work Best? A Meta-Analysis on the Role of Unions, Culture, and Values," IZA Discussion Papers 11617, Institute of Labor Economics (IZA).
    8. C Green & J S Heywood, 2007. "Does profit sharing increase training by reducing turnover?," Working Papers 589032, Lancaster University Management School, Economics Department.
    9. Joshua D. Pitts & Brent A. Evans, 2023. "New contracts and dismissal threats from highly drafted rookies: What motivates NFL quarterbacks?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 4-16, January.
    10. Kshitija Dixit & Rupayan Pal, 2010. "The impact of group incentives on performance of small firms: Hausman-Taylor estimates," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(6), pages 403-414.

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