Incentive payment and nonmanagerial productivity: An interrupted time series analysis of magnitude and trend

Using an interrupted time series design, this paper examined long-term changes in the magnitude and trend of productivity following the introduction of nonmanagerial incentive payment. Analyses of three 114-month data series from a unionized iron foundry revealed a strong asymptotic increase in productivity without corresponding increases in labor costs or employee grievances. These findings substantiated a power-curve trend in productivity, implying that wage incentives might stimulate employees to learn efficacious task behaviors, and suggesting that incentive payment's long-term productive efficacy might be greater than many of the short-term gains reported in prior research