Monitoring for worker quality
Files
Accepted manuscript
Date
2017-07-01
DOI
Authors
Bose, Gautam
Lang, Kevin
Version
OA Version
Citation
Gautam Bose, Kevin Lang. 2017. "Monitoring for worker quality." Journal of Labor Economics, v. 35, Issue 3, pp. 755 - 785 (31).
Abstract
Much nonmanagerial work is routine, with all workers having similar output most of the time. However, failure to address occasional challenges can be very costly, and consequently easily detected, while challenges handled well pass unnoticed. We analyze job assignment and worker monitoring for such “guardian” jobs. If monitoring costs are positive but small, monitoring is nonmonotonic in the firm’s belief about the probability that a worker is good. The model explains several empirical regularities regarding nonmanagerial internal labor markets: low use of performance pay, seniority pay, rare demotions, wage ceilings within grade, and wage jumps at promotion.
Description
License
© 2017 by The University of Chicago. All rights reserved.