PIECE RATES, OUTPUT RESTRICTION, AND CONFORMISM

This paper examines how group output norms affect work effort when piece rates are subject to revision. A simple model of conformism to group norms reproduces numerous features of observed piece rate schemes. (1) If there is any loss of utility for those who deviate from group norms, then workers restrict output when faced with piece rate revision. (2) Ratebusters have below average disutility of effort, and/or have below average costs of deviating from group norms. (3) Any ratebuster will deviate by a large amount from the group norms. (4) When pressures to conform increase, the amount of output restriction will increase (unless there was already enough pressure to sustain the collusive equilibrium). (5) Workers will oppose changes in technology, because they will fear that it will reduce their pay. (6) At the end of a production run, workers are likely to increase output substantially.