TY  - RPRT
        AU  - Bellemare, Charles
AU  - Shearer, Bruce S.
        TI  - Measuring Ratchet Effects within a Firm: Evidence from a Field Experiment Varying Contractual Commitment
        PY  - 2014/May/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 8214
        UR  - https://www.iza.org/publications/dp8214
        AB  - We present results from a field experiment designed to measure the importance of managerial commitment to a contract within a firm that pays its workers piece rates. In the tree planting industry the piece rate paid to workers is determined as a function of the difficulty of the terrain to be planted. During the experiment, workers began planting a terrain at a trial piece rate, but were told this rate would be revised upwards if, after a few work days, average productivity was below that observed on a similar (control) terrain on which the firm had committed to the contract. Our results suggest that worker productivity was 20% to 40% lower in the absence of commitment. The reduction was less pronounced when workers had less time to benefit from any subsequent increase in the piece rate. This provides support for models of worker turnover as a means of overcoming ratchet effects.
        KW  - ratchet effect
KW  - piece rates
KW  - incentive contracts
KW  - field experiments
        ER  -