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The Choice of Payment Schemes: Australian Establishment Data

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  • Robert Drago

    (Univ. of Wisconsin-Milwaukee)

  • John S. Heywood

    (Univ. of Wisconsin-Milwaukee)

Abstract

This paper estimates the determinants of incentive schemes. Using Australian data, we analyze a relatively large variety of incentive systems (i.e., individual piece rates, workgroup performance bonuses, workplace level systems and profit sharing) using both the new economics of personnel and the literature on strategic choice to generate hypotheses. We find that monitoring issues, job security, product market competition, and the industrial relations climate rank among the most crucial determinants of incentive use, though this pattern varies across incentive schemes.

Suggested Citation

  • Robert Drago & John S. Heywood, 1994. "The Choice of Payment Schemes: Australian Establishment Data," Labor and Demography 9402001, University Library of Munich, Germany, revised 04 Feb 1994.
    • Handle: RePEc:wpa:wuwpla:9402001
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    References listed on IDEAS

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    1. Gregg, P. A. & Machin, S. J., 1988. "Unions and the incidence of performance linked pay schemes in Britain," International Journal of Industrial Organization, Elsevier, vol. 6(1), pages 91-107, March.
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    9. Dale Belman & John Heywood, 1988. "Incentive schemes and racial wage discrimination," The Review of Black Political Economy, Springer;National Economic Association, vol. 17(1), pages 47-56, June.
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    • J - Labor and Demographic Economics

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