A Comparative Analysis of the Incentive Systems Under Taylorism and Fordism

Storia del Pensiero Economico, 2008/2, 65-89

25 Pages Posted: 6 Jul 2012 Last revised: 28 Dec 2013

See all articles by Maurizio Lisciandra

Maurizio Lisciandra

University of Messina - Department of Economics

Date Written: 2008

Abstract

Lliterature on Taylorism has surprisingly ignored the role of its payment systems, while the results achieved on Ford’s five-dollar day programme appear contradictory and sometimes isolated from the organisational change simultaneously undertaken. I seek to fill these theoretical gaps. I provide a historical analysis of the relevant features of Taylorism and Fordism and analyse a simple agency model with a linear compensation scheme to account for the observed differences in payment systems between Taylor’s performance-related pay and Ford’s fixed wages. I show how the ex-post observed divergence may be interpreted in terms of technology-related differences in i) responsiveness of effort to incentives and ii) responsiveness of proceeds to effort.

Keywords: Taylorism, Fordism, agency theory, labour contracts, incentives

JEL Classification: D8, J3, J41, L2

Suggested Citation

Lisciandra, Maurizio, A Comparative Analysis of the Incentive Systems Under Taylorism and Fordism (2008). Storia del Pensiero Economico, 2008/2, 65-89, Available at SSRN: https://ssrn.com/abstract=2100371

Maurizio Lisciandra (Contact Author)

University of Messina - Department of Economics ( email )

Piazza Pugliatti 1
Messina, 98122
Italy
+39 (0)906764620 (Phone)

HOME PAGE: http://https://sites.google.com/site/mlisciandra/

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