Worker Responses to Shirking

Abstract

Group incentive systems have to overcome the free rider or 1/N problem, which gives workers an incentive to shirk, if they are to succeed. This paper uses new questions on responses to shirking from the General Social Survey and a special NBER survey of workers in 14 companies and over 300 worksites with some form of group incentive pay to examine how well workers can monitor their peers and what they do when the peers are not working up to speed. Most workers say that they can detect fellow employees who shirk. Many report that they would speak to the shirker or report the behavior or a supervisor, and many report doing so in the past. The proportion that takes action against shirkers is greatest among workers paid under group incentive systems, in smaller companies, and in companies with good employeemanagement relations. The group incentives interact with high-performance human resource policies such as employee involvement teams, training, task variety, low levels of supervision, and good fixed wages to induce more workers to act against shirking. In addition, workers in workplaces where there is more anti-shirking behavior report that co-workers work harder, encourage other workers more, and report that their workplace facility is more effective in several dimensions related to productivity and profits. We cast doubt on the alternative theory that anti-shirking behavior and shared capitalism are not causally related but are both consequences of production processes based on certain technologies.

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