Variable pay and job performance of shop-floor workers in lean production

Vathsala Wickramasinghe () and G.L.D. Wickramasinghe
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Vathsala Wickramasinghe: University of Moratuwa
G.L.D. Wickramasinghe: University of Moratuwa

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Abstract: Purpose- The study investigated design features of variable pay plans adopted for shop-floor workers engaged in manufacturing firms that had implemented lean production systems, and the effects of design features on their job performance. Design/methodology/approach- 892 shop-floor workers attached to lean implemented manufacturing firms in Sri Lanka responded for the study. Structural equation modelling was used for the data analysis. Findings- It was found that the performance evaluation-base for variable payments, variable pay calculation-base and goal setting for variable pay significantly predict job performance of the shop-floor workers. Originality/value- It could be expected that the academics and practitioners alike are motivated by their desire to clearly apprehend the contribution of variable pay plans on job performance of the shop-floor workers engaged in lean production systems. This demands more investigations to better understand the design features of variable pay plans.

Keywords: Pay-for-performance systems; Variable pay; Incentive compensation; Performance-based pay; Job performance; Human resource management in manufacturing; Employee rewards and recognition; Lean production; Manufacturing performance; Kaizen practices; Compensation management; Productivity improvement; Operational performance; Employee motivation; Lean manufacturing (search for similar items in EconPapers)
Date: 2016
Note: View the original document on HAL open archive server: https://hal.science/hal-05588646v1
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Published in Journal of Manufacturing Technology Management, 2016, 27, pp.287 - 311. ⟨10.1108/jmtm-12-2014-0130⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05588646

DOI: 10.1108/jmtm-12-2014-0130

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