Piece Rates, Fixed Wages, and Incentive Effects: Statistical Evidence from Payroll Records

We develop and estimate an agency model of worker behavior under piece rates and fixed wages. The model implies optimal decision rules for the firm's choice of a compensation system as a function of working conditions. Our model also implies an upper and lower bound to the incentive effect (the productivity gain realized by paying workers piece rates rather than fixed wages) that can be estimated using regression methods. Using daily productivity data collected from the payroll records of a British Columbia tree-planting firm, we estimate these bounds to be an 8.8 and a 60.4 percent increase in productivity. Structural estimation, which accounts for the firm's optimal choice of a compensation system, suggests that incentives caused a 22.6 percent increase in productivity. However, only part of this increase represents valuable output because workers respond to incentives, in part, by reducing quality.     

Wage protection systems, segregation and gender pay inequalities: West Germany, the Netherlands and Great Britain

This paper provides an empirical test of Rubery and Fagan's(1995) hypothesis that gender inequalities are influenced primarilyby the comprehensiveness of the overall wage protection systemin a country and by the extent of gender segregation. Genderdiscrimination in earnings is compared in West Germany, theNetherlands and Great Britain using 1989 ISSP data. Human capitalearnings functions for married males and married females areestimated. Discrimination is measured using standard decompositiontechniques. Earnings discrimination against females in the morecomprehensive systems was 37% in West Germany and 39% in theNetherlands, much less than the 61% found for the less comprehensivelyregulated Great Britain, the latter figure being higher thanprevious estimates using earlier data. Gender segregation isdemonstrated to have contributed to the relative magnitude ofdiscrimination in Great Britain.     

Can Social Cohesion be Harnessed to Repair Market Failures? Evidence from Group Lending in Guatemala

The success of group lending in developing countries has been attributed to the ability of the institution to mitigate asymmetric information problems in credit markets. Previous research has offered a number of explanations for this phenomenon: social ties between borrowing group members, internal group pressure to repay loans, and peer monitoring. This research presents empirical tests on borrowing group data from Guatemala which indicate that peer monitoring significantly effects borrowing group performance through stimulating intra-group insurance. Group pressure is found to have a small effect in deterring moral hazard, while the effect of social ties among members is statistically insignificant.     

The use of Probability-Multipliers in Replacement Analysis

Engineering economy analyses are often made for both the most and least favorable combinations of forecasted future conditions. This procedure has two major weaknesses. First, the two solutions usually indicate that contradictory courses of action should be followed. When this occurs, the engineeringeconomic study has failed to provide the management of a business with a quantitative aid and mathematical method for evaluating data and arriving at sound decisions. Second, that method of analysis is unrealistic because it emphasizes the extreme possibilities rather than some intermediate situation which is more likely to occur.     

Interpreting Nicknames: A Micropolitical Portal

Perhaps due to their ubiquitous and seemingly nonsensical nature, workplace nicknames have received little analytic attention to date. This exploratory study based on six case scenarios from the United States reveals nicknames often convey potent meanings. These monikers are found to have a wide variety of purposes: including among others, furthering social control, contributing to socialization, marking group boundaries, building camaraderie, catalysing joking, conveying discontent, cathartically venting frustrations, equalizing social exchanges and adjusting to labelling. Although the nicknaming and collateral social processes we encountered were not the product of formal planning, they are a complex and highly organized set of micropolitical activities. In the future, nicknames should be thought of as key symbols that can unlock many meanings when they are properly interpreted