Team incentives and worker heterogeneity: An empirical analysis of the impact of teams on productivity and participation

Barton H. Hamilton, Jack A. Nickerson, Hideo Owan

Research output: Contribution to journalArticlepeer-review

338 Citations (Scopus)

Abstract

This paper identifies and evaluates rationales for team participation and for the effects of team composition on productivity using novel data from a garment plant that shifted from individual piece rate to group piece rate production over three years. The adoption of teams at the plant improved worker productivity by 14 percent on average. Productivity improvement was greatest for the earliest teams and diminished as more workers engaged in team production, providing support for the view that teams utilize collaborative skills, which are less valuable in individual production. High-productivity workers tended to join teams first, despite a loss in earnings in many cases, suggesting nonpecuniary benefits associated with teamwork. Finally, more heterogeneous teams were more productive, with average ability held constant, which is consistent with explanations emphasizing mutual team learning and intrateam bargaining.

Original languageEnglish
Pages (from-to)465-497
Number of pages33
JournalJournal of Political Economy
Volume111
Issue number3
DOIs
Publication statusPublished - 2003 Jun 1
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics

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