The Adoption of Production Incentives in Spain

We attempt to identify the factors that determine the use of production incentives for manual workers in Spanish manufacturing industry. Data relating to 629 manufacturing plants are used in the investigation. Our findings show that intensified competition, membership of a multinational firm and public ownership have a negative effect. Also, production incentives are associated with lower monitoring, narrowness of job description and teamwork. The evidence obtained rejects the hypothesis of a negative association between incentive payment and several features associated with internal labour markets. Finally, union influence is found to have a positive influence on the use of incentives.