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May 1982, Vol. 105, No. 5
Time rates tighten their grip
on manufacturing industries
Norma W. Carlson
Despite mounting concern in recent years over limited productivity gains in the Nation's manufacturing industries, interest in incentive pay systems seems to be declining as a way to stimulate worker output. A review of wage payment plans in manufacturing industries found that time rates continue to cover the great majority of production and related workers rather than losing their grip; time-rated systems are actually strengthening their hold in U.S. factories.
Emphasis on machine-paced manufacturing operations is a major reason for the limited incidence of incentive plans. As in earlier years, incentives tend to be concentrated in the restricted group of industries where workers can exert substantial influence on the rate of output. However, the widespread application of time rates does not mean that the impact of workers on production is being ignored. Various innovative programs, many independent of compensation systems, have emerged to address the issue of worker motivation.
This article examines recent trends in incentive and time-related payments in manufacturing. It also explores factors that have influenced the movement toward time pay. Finally, the article highlights developments in the quality-of-worklife movement that seeks, among other goals, to motivate workers to higher performance on the job. Data were obtained from the Bureau of Labor Statistics' nationwide occupational wage surveys in selected manufacturing industries. These surveys collect information on occupational wage rates and the incidence of certain establishment practices, such as methods of wage payment, for about 50 manufacturing industries. Thirty-seven were selected for this study on the basis of available data for two 7-year periods, 1961-68 and 1973-80. The periods were defined over several years because the industries on the survey roster are studies every 3 to 5 years, not annually. The sample was also restricted to industries defined at the 4-digit level of detail in the Standard Industrial Classification Manual prepared by the U.S. Office of Management and Budget. Altogether for both periods examined, the 37-industry group represents about a quarter of the production and related workers in all manufacturing.1 The span between observations for a single industry ranged from 10 years to 18; the average was 14 years.
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1 The sample is relatively small because several manufacturing industries in the wage survey program were excluded either for lack of nationwide statistics or historical data. These include women's and misses' dresses, drug manufacturing, nonelectrical machinery, semiconductors, electrical transmission and distribution equipment, millwork, upholstered furniture, and shipbuilding and repairing. Because of the limited number of industries studied, no generalizations are drawn about methods of wage payment for all manufacturing.
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