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CH0104Trade-Off between Supervision and Wages(激励与组织-北京大学,周黎安)
一 Introduction: Efficiency Wage Model Fundmental Feature: Employers elicit productivity or quality enhancing behaviors from employees by paying wages above the opportunity cost of labor. Two competing views: “Instrumental” efficiency wage model “Gift exchange” model Introduction: Efficiency Wage Model A“Instrumental” efficiency wage model: High wages are a carrot which employers use(together with the stick of dismissal threats) to persuade workers to supply high levels of work effort(Bowles, 1985: Shapiro and Stiglitz, 1984) B “Gift exchange” model: High wages are “gifts ”that appeal to norms of loyalty and mutual obligation in workers(Akerlof, 1982) Introduction: Empirical Question A straight forward empirical question: Does the setting of high wages influence the productivity (or quality) enhancing behaviors of employees? The major difficulty: Separating the efficiency wage effect from the positive association between productivity and wages predicted by conventional competitive models. Introduction: An alternative method An alternative to studying the direct effect of wage premium on employee behaviors is to examine the relationship between wages and other means of regulating the activities of employees This negative relationship between wages and supervision should appear in both “Instrumental” efficiency wage model and“Gift exchange” model, although for different reasons. Introduction: An alternative method In “instrumental” efficiency wage model , supervision, wage premia and dismissal threats together create incentives for employees to work hard rather than shirk In “Gift exchange” model, the motivational problem is to induce employees to internalize the goals of the enterprise by appealing to norms of reciprocity and fairness.This appeal requires the payment of wages above the opportunity cost of labor. Supervision is not central to the problem of motivation. Introduction: the troublesome measuring Omitted variable bias
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