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The hidden costs of high performance work practices: evidence from a large German steel company

Frick, Bernd and Goetzen, Ute and Simmons, Robert (2013) The hidden costs of high performance work practices: evidence from a large German steel company. Industrial and Labor Relations Review, 66 (1). pp. 198-224. ISSN 0019-7939

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Abstract

The authors use monthly data from 25 production units in a German steel plant over the period 1992 to 2001 to test for impacts of teamwork and performance-related pay on productivity, accidents, and absence rates. They find that teamwork and performance pay provide incentives to workers to increase quantity at the expense of quality and to run the machines for long hours instead of spending time on maintenance. Absenteeism increases when a combination of teamwork and performance pay is applied to production units that previously had neither. Results suggest that teamwork and performance pay can create hidden costs for manufacturers and do not necessarily increase worker productivity.

Item Type: Article
Journal or Publication Title: Industrial and Labor Relations Review
Subjects: H Social Sciences > HB Economic Theory
Departments: Lancaster University Management School > Economics
ID Code: 56342
Deposited By: ep_importer_pure
Deposited On: 25 Jul 2012 10:23
Refereed?: Yes
Published?: Published
Last Modified: 10 Oct 2014 09:04
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/56342

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