The Consequences of a Piece Rate on Quantity and Quality: Evidence from a Field Experiment
This field experiment examines output quantity and quality for workers in a data input business. We observe two sets of workers that differ in monitoring intensity as they move from time to piece rates. The application of piece rates increases quantity, and we find that the resultant quality can be improved with sufficient monitoring. "Committed" workers also produce higher quantity and quality, showing the role of worker selection - which appears especially strong under time rates. Our results thus show how a firm can refine its worker selection and monitoring options together with the payment system to deliver its chosen quality-quantity combination.
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- Bruce Shearer, 2004. "Piece Rates, Fixed Wages and Incentives: Evidence from a Field Experiment," Review of Economic Studies, Oxford University Press, vol. 71(2), pages 513-534.
- Lazear, Edward P, 1986. "Salaries and Piece Rates," The Journal of Business, University of Chicago Press, vol. 59(3), pages 405-431, July.
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"Performance Pay and Productivity,"
NBER Working Papers
5672, National Bureau of Economic Research, Inc.
- Glenn MacDonald & Leslie M. Marx, 2001. "Adverse Specialization," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 864-899, August.
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