%0 Report
        %A Frederiksen, Anders
%A Hansen, Daniel Baltzer Schjødt
%A Manchester, Colleen Flaherty
        %T Does Group-Based Incentive Pay Lead To Higher Productivity? Evidence from a Complex and Interdependent Industrial Production Process
        %D 2022
        %8 2022 Jan
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 14986
        %U https://www.iza.org/index.php/publications/dp14986
        %X Group-based incentive pay is attractive in contexts where production is complex and interdependent, yet freeriding is a paramount concern. We assess the introduction of group-based performance pay in a modern industrial production setting using difference-in-difference estimation. Performance increased by 19 percent, with three quarters coming from increased performance of existing workers and the remaining from selection; workers became more efficient and were absent less often. We find little evidence of freeriding; quantile regressions show increased performance throughout the distribution of workers. Features of the design and implementation process created trust, a common goal, and a shared identity, which limited freeriding.
        %K absenteeism
%K selection effects
%K incentive effects
%K freeriding
%K group-based incentive
%K performance pay
%K difference-in-differences
%K efficiency
%K performance
%K productivity
%K trust