Piece-rates and tournaments: Implications for learning in a cognitively challenging task

2017 ◽  
Vol 142 ◽  
pp. 11-23 ◽  
Author(s):  
Tony So ◽  
Paul Brown ◽  
Ananish Chaudhuri ◽  
Dmitry Ryvkin ◽  
Linda Cameron
Keyword(s):  
Piece Rates

scholarly journals Anatomy of a Contract Change

2016 ◽  
Vol 106 (2) ◽  
pp. 316-358 ◽  
Author(s):  
Rajshri Jayaraman ◽  
Debraj Ray ◽  
Francis de Véricourt
Keyword(s):  
Standard Model ◽  
Extended Period ◽  
Behavioral Models ◽  
The Standard Model ◽  
Piece Rates

We study a contract change for tea pluckers on an Indian plantation, with a higher government-stipulated baseline wage. Incentive piece rates were lowered or kept unchanged. Yet, in the following month, output increased by 20 to 80 percent. This response contradicts the standard model and several variants, is only partly explicable by greater supervision, and appears to be “behavioral.” But in subsequent months, the increase is comprehensively reversed. Though not an unequivocal indictment of “behavioral” models, these findings suggest that nonstandard responses may be ephemeral, and should ideally be tracked over an extended period of time. (JEL D82, D86, J33, J41, J43, O13, Q12)

scholarly journals Incentive provision to farm workers in post-socialist settings: evidence from East Germany and North Kazakhstan

2017 ◽  
Vol 20 (2) ◽  
pp. 239-256 ◽  
Author(s):  
Martin Petrick
Keyword(s):  
Reference Group ◽  
East Germany ◽  
Primary Data ◽  
Time Rate ◽  
Rate System ◽  
Cross Sectional ◽  
Piece Rate ◽  
East German ◽  
Wage Premia ◽  
Piece Rates

This article explores the current practice of motivating agricultural workers in post-socialist settings. In addition, it attempts to evaluate the different wage systems observed in reality and better understand under which conditions they are reformed. It does so by contrasting the experience of two extreme cases representing fast and slow reform advance, East Germany and North Kazakhstan. The primary data for the analysis comes from cross-sectional farm surveys conducted by various researchers in both countries. East German farmers quickly replaced the inherited Soviet-style piece rate payment system by simple time rate schemes, augmented by wage premia for certain performance parameters, especially in livestock. To the contrary, the piece rate approach persists in many farms in North Kazakhstan. Moreover, the latter rarely use non-wage incentives to motivate their workers. In Kazakhstan, farms using either mixed systems or pure piece rates were more productive than the reference group using pure time rates. Labour cost per worker were lowest for pure time rate systems in both countries, followed by mixed bonus systems, whereas pure piece rate systems implied the highest cost in Kazakhstan. Kazakhstani managers tend to move away from the Soviet piece rate system if external investors become engaged in farming operations.

Do piece rates influence effort choices? Evidence from stadium vendors

2001 ◽  
Vol 73 (1) ◽  
pp. 117-123 ◽  
Author(s):  
Gerald S. Oettinger
Keyword(s):  
Piece Rates

scholarly journals SALARIES OR PIECE RATES: ON THE ENDOGENOUS MATCHING OF HARVEST WORKERS AND CROPS

2015 ◽  
Vol 54 (1) ◽  
pp. 76-99 ◽  
Author(s):  
Ivan Kandilov ◽  
Tomislav Vukina
Keyword(s):  
Endogenous Matching ◽  
Piece Rates

Industrial Relations and the Industrial Revolution: Evidence from M'Connel and Kennedy, 1810–1840

1991 ◽  
Vol 65 (2) ◽  
pp. 345-378 ◽  
Author(s):  
Michael Huberman
Keyword(s):  
Industrial Revolution ◽  
Industrial Relations ◽  
Work Organization ◽  
Conventional Wisdom ◽  
Managerial Strategies ◽  
Piece Rates

Using the record books of M'Connel and Kennedy, a leading cotton-spinning firm in Manchester, this article traces the development of managerial strategies to elicit effort from workers during the Industrial Revolution. Contrary to the conventional wisdom, the firm had difficulty in extracting effort from its workers, who were unwilling to increase output without capturing some of the gains through wage adjustments. Since spinners controlled the work organization, M'Connel and Kennedy had to accommodate workers' demands for stable piece rates, which were codified in the Manchester list of prices of 1829.

scholarly journals Asymptotic efficiency of the proportional compensation scheme for a large number of producers

2018 ◽  
Vol 28 (4) ◽  
pp. 501-520
Author(s):  
Dmitry Rokhlin ◽  
Anatoly Usov
Keyword(s):  
Returns To Scale ◽  
Total Output ◽  
Total Production ◽  
Compensation Scheme ◽  
Rational Agents ◽  
Unique Nash Equilibrium ◽  
The Difference ◽  
Convex Costs ◽  
Optimal Reward ◽  
Piece Rates

We consider a manager who allocates some fixed total payment amount between N rational agents in order to maximize the aggregate production. The profit of i-th agent is the difference between the compensation (reward) obtained from the manager and the production cost. We compare (i) the normative compensation scheme where the manager enforces the agents to follow an optimal cooperative strategy; (ii) the linear piece rates compensation scheme where the manager announces an optimal reward per unit good; (iii) the proportional compensation scheme where agent's reward is proportional to his contribution to the total output. Denoting the correspondent total production levels by s*, ? and s? respectively, where the last one is related to the unique Nash equilibrium, we examine the limits of the prices of anarchy AN = s*/s?, A'N = ?/s? as N ? ?. These limits are calculated for the cases of identical convex costs with power asymptotics at the origin, and for power costs, corresponding to the Coob-Douglas and generalized CES production functions with decreasing returns to scale. Our results show that asymptotically no performance is lost in terms of A'N , and in terms of AN the loss does not exceed 31%.

scholarly journals Individual incentives and workers’ contracts: evidence from a field experiment

2019 ◽  
Author(s):  
M Ali Choudhary ◽  
Vasco J Gabriel ◽  
Neil Rickman
Keyword(s):  
Field Experiment ◽  
Incentive Pay ◽  
Current Season ◽  
Present Evidence ◽  
Tournament Theory ◽  
Piece Rates

Abstract We present evidence on the operation of incentive pay from a field experiment in Pakistan, looking at piece rates and pay based on rank achieved in a tournament. Importantly, some workers are in contracts ‘tying’ them to the employer for several picking seasons; others are ‘untied’, in the sense of being employed for only the current season. We find that incentive pay (of either type) improves productivity by 30%, on average, but that there are important differences across the types of workers: in particular, tournament incentives are less effective amongst the tied workers. We suggest that our main results have implications for tournament theory and the design of incentive pay schemes, particularly with regard to the fact that they may discourage some workers and, thus, reduce incentives.

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