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  3. Journal of Economic Perspectives
  4. Winter 2003
  5. Beyond Incentive Pay: Insiders' Estimates of the Value of Complementary Human Resource Management Practices

Beyond Incentive Pay: Insiders' Estimates of the Value of Complementary Human Resource Management Practices

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Abstract

Do human resource management (HRM) practices, such as incentive pay, teamwork, training, and careful screening practices, raise productivity, and if so, under what conditions does productivity rise? Recently, this question has been a central focus in organizational and personnel economics. We emphasize the value of a new research approach--an approach we label "insider econometrics"--that is aimed going deep inside businesses to obtain data and insights into the ways in which HRM practices affect specific production processes. We conclude that sets of complementary HRM practices appear to raise performance, but that some firms, such as those that make complex products or those that are starting up brand new facilities, benefit more from these practices.

Citation

Ichniowski, Casey, and Kathryn Shaw. 2003. "Beyond Incentive Pay: Insiders' Estimates of the Value of Complementary Human Resource Management Practices ." Journal of Economic Perspectives, 17 (1): 155-180. DOI: 10.1257/089533003321164994

JEL Classification

  • M12 Personnel Management; Executives; Executive Compensation
  • M52 Personnel Economics: Compensation and Compensation Methods and Their Effects
  • J32 Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
  • J33 Compensation Packages; Payment Methods
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