Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation

Posted: 30 May 2003

See all articles by Barton H. Hamilton

Barton H. Hamilton

Washington University, Saint Louis - John M. Olin School of Business

Jackson A. Nickerson

Washington University in St. Louis - John M. Olin Business School

Hideo Owan

University of Tokyo

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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.

Suggested Citation

Hamilton, Barton H. and Nickerson, Jackson A. and Owan, Hideo, Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation. Journal of Political Economy, Vol. 111, June 2003. Available at SSRN: https://ssrn.com/abstract=397800

Barton H. Hamilton (Contact Author)

Washington University, Saint Louis - John M. Olin School of Business ( email )

One Brookings Drive, Campus Box 1133
St. Louis, MO 63130-4899
United States
314-935-8057 (Phone)
314-935-6359 (Fax)

HOME PAGE: http://www.olin.wustl.edu/faculty/hamiltonb/

Jackson A. Nickerson

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States
314-935-6366 (Phone)
314-935-6359 (Fax)

Hideo Owan

University of Tokyo ( email )

Hongo 7-3-1
Tokyo, TOKYO 113-0033
Japan

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