Is Seniority-Based Pay Used as a Motivation Device? Evidence from Plant Level Data

Alberto Bayo-Moriones, Jose Galdon-Sanchez () and Maia Güell ()

No 1321, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: monitoring; incentives; human resource management practices (search for similar items in EconPapers)
JEL-codes: J30 M12 M52 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2004-09
New Economics Papers: this item is included in nep-bec and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Research in Labor Economics, 2010, 30, 155-187

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Related works:
Chapter: Is seniority-based pay used as a motivational device? Evidence from plant-level data (2010)
Working Paper: Is Seniority-Based Pay used as a Motivation Device? Evidence from Plant Level Data (2004)
Working Paper: Is Seniority-Based Pay Used as a Motivation Device? Evidence from Plant Level Data (2004)
Working Paper: Is Seniority-Based Pay Used as a Motivation Device? Evidence from Plant Level Data (2004)
Working Paper: Is seniority-based pay used as a motivation device? Evidence from plant level data (2004)
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