Variable pay and job performance of shop-floor workers in lean production

Abstract

Purpose

The purpose of this paper is to investigate design features of variable pay plans adopted for shop-floor workers engaged in manufacturing firms that had implemented lean production systems, and the effects of design features on their job performance. Design/methodology/approach

In total, 892 shop-floor workers attached to lean implemented manufacturing firms in Sri Lanka responded for the study. Structural equation modelling was used for the data analysis. Findings

It was found that the performance evaluation-base for variable payments, variable pay calculation-base and goal setting for variable pay significantly predict job performance of the shop-floor workers. Originality/value

It could be expected that the academics and practitioners alike are motivated by their desire to clearly apprehend the contribution of variable pay plans on job performance of the shop-floor workers engaged in lean production systems. This demands more investigations to better understand the design features of variable pay plans.