Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20589
Authors: 
Bayo-Moriones, Alberto
Galdon-Sanchez, José Enrique
Güell, Maia
Year of Publication: 
2004
Series/Report no.: 
IZA Discussion paper series 1321
Abstract: 
In this paper we use data from industrial plants to investigate if seniority-based pay is used as a motivational device for production workers. Alternatively, seniority-based pay could simply be a wage setting rule not necessarily related to the provision of incentives. Unlike previous papers, we use a direct measure of seniority-based pay as well as measures of monitoring devices and piece-rates. We find that firms that offer seniority-based pay are less likely to offer explicit incentives. They are also less likely to invest in monitoring devices. We also find that firms that offer seniority-based pay are more likely to engage in other human resource management policies that result in long employment relationships. Overall these results suggest that seniority-based pay is indeed used as a motivation device.
Subjects: 
human resource management practices
incentives
monitoring
JEL: 
M12
M52
J30
Document Type: 
Working Paper

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