You are not currently logged in.
Access JSTOR through your library or other institution:
Performance Pay and Productivity
Edward P. Lazear
The American Economic Review
Vol. 90, No. 5 (Dec., 2000), pp. 1346-1361
Published by: American Economic Association
Stable URL: http://www.jstor.org/stable/2677854
Page Count: 16
You can always find the topics here!Topics: Wages, Productivity, Purchasing power parity, Statistical variance, Incentive pay, Piecework, Standard deviation, Business structures, Workforce, Economic theory
Were these topics helpful?See somethings inaccurate? Let us know!
Select the topics that are inaccurate.
Preview not available
Much of the theory in personnel economics relates to effects of monetary incentives on output, but the theory was untested because appropriate data were unavailable. A new data set for the Safelite Glass Corporation tests the predictions that average productivity will rise, the firm will attract a more able workforce, and variance in output across individuals at the firm will rise when it shifts to piece rates. In Safelite, productivity effects amount to a 44-percent increase in output per worker. This firm apparently had selected a suboptimal compensation system, as profits also increased with the change.
The American Economic Review © 2000 American Economic Association