Firm-Wide Incentives and Mutual Monitoring at Continental Airlines

Marc Knez and Duncan Simester

Journal of Labor Economics, 2001, vol. 19, issue 4, 743-72

Abstract: In February 1995 Continental Airlines introduced an incentive scheme that promised monthly bonuses to all 35,000 hourly employees if the company achieved a firm-wide performance goal. Conventional wisdom suggests that free riding will render such schemes ineffective. We present evidence indicating that the incentive scheme raised employee performance despite the apparent threat of free riding. To explain why the scheme may have been effective we argue that the organization of employees into autonomous work groups enabled Continental to induce mutual monitoring among employees within each work group. Copyright 2001 by University of Chicago Press.

Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (192)

Downloads: (external link)
http://dx.doi.org/10.1086/322820 full text (application/pdf)
Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JOLE for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlabec:v:19:y:2001:i:4:p:743-72

Access Statistics for this article

More articles in Journal of Labor Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().