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

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

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: In this paper we use data from industrial plants to investigate if seniority-based pay is used asa motivational device for production workers. Alternatively, seniority-based pay could simplybe a wage setting rule not necessarily related to the provision of incentives. Unlike previouspapers, we use a direct measure of seniority-based pay as well as measures of monitoringdevices and piece-rates. We find that firms that offer seniority-based pay are less likely tooffer explicit incentives. They are also less likely to invest in monitoring devices. We alsofind that firms that offer seniority-based pay are more likely to engage in other humanresource management policies that result in long employment relationships. Overall theseresults suggest that seniority-based pay is indeed used as a motivation device.

Keywords: Human resource management practices; incentives; monitoring (search for similar items in EconPapers)
JEL-codes: J30 M12 M52 (search for similar items in EconPapers)
Date: 2004-08
New Economics Papers: this item is included in nep-bec
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Citations: View citations in EconPapers (2)

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https://cep.lse.ac.uk/pubs/download/dp0646.pdf (application/pdf)

Related works:
Working Paper: Is Seniority-Based Pay used as a Motivation Device? Evidence from Plant Level Data (2015)
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)
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