Year: 2000
Type: article
Abstract: 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. (JEL J00, J22, J3)
Source: American Economic Review
Author: Edward P Lazear
Institutions: Hoover Institution, Stanford University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
Funder: National Science Foundation
OpenAlex ID: W3122276354