Seniority-based pay: Is it used as a motivation device?
The purpose of this article is to explain what factors determine the use of seniority-based pay for production workers in Spanish manufacturing industry. The data used in order to achieve these objectives was taken from 774 Spanish industrial plants. The estimation of several ordered probit models enabled us to see that in firms where it was more costly for management to engage in opportunistic behaviour, deferred payment shows a negative relation to the use of devices, like monitoring or incentive payment, designed to align workers’ objectives with those of the company.
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